Anglo American pays out record $4.1 bln to shareholders for first half

PUBLISHED: Thu, 29 Jul 2021 11:05:25 GMT
Clara Denina and Zandi Shabalala
Reuters
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Key Points
  • Anglo books record H1 profit, beats forecasts
  • Prices for copper, iron ore, platinum group metals soar
  • Shares jump nearly 5%
In this article
    A sign stands at the entrance to the offices of Anglo American Plc in the Marshalltown district of Johannesburg, South Africa, on Friday, Oct. 26, 2012. Anglo American Plc Chief Executive Officer Cynthia Carroll , the first woman, external hire and non-South African to hold the job, will quit after Anglo lost $14 billion in value in the more than five years she was in charge. Photographer: Chris Ratcliffe/Bloomberg via Getty Images

    LONDON, July 29 (Reuters) – Global miner Anglo American on Thursday boosted its shareholder payout to a record $4.1 billion, sending its stock up almost 5% after bumper commodity prices lifted first-half profits to their best ever.

    London-listed shares in Anglo, which hit their highest since 2008 in May, were up 4.6% by 0740 GMT. This was their loftiest since June.

    Soaring prices for most of Anglo’s products, including copper, iron ore and platinum group metals, helped the miner, which was hardest hit among its peers by COVID-19 lockdowns in many African countries, lift first-half profits to a record.

    Read more: Anglo American Platinum contributes 3.5mln dollars to Limpopo Road Agency

    Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $12.1 billion for the six months to June 30, up from $3.4 billion in the same period last year, beating the $10.9 billion expected by 12 analysts compiled by Vuma.

    Rising costs hurt underlying EBITDA by $200 million, it said.

    Anglo American Platinum H1 earnings surge on higher metal prices

    Anglo declared an interim dividend of 1.71 cents per share, up from 0.28 cents last year, totalling $2 billion, and a special dividend of 0.8 cents per share, or $1 billion. It also announced a $1 billion share buyback programme.

    “I still don’t think it’s our finest hour, that is yet to come … From our point of view it’s a good milestone,” Chief Executive Officer Mark Cutifani told reporters after the results.

    Net debt fell by 74% to $2 billion in the first half compared to a year earlier, reflecting high prices.

    “The underlying investment case at Anglo American remains strong, with differentiated high quality growth, better diversification vs. peers and increasing shareholder returns adds to this compelling mix,” RBC Capital analysts said.

    Read more: Anglo American sells Eskom-tied coal assets for $71 million

    “Today’s cost increases are likely to weigh (as they are doing across the industry albeit Anglo appears more exposed due to its more emerging markets-weighted asset base) but shares remain inexpensive,” they said in a note.

    Surging commodity prices have emboldened miners to dish out high shareholder payouts, with Rio Tinto on Wednesday being the first of the global miners to announce a record dividend after a blockbuster first half.

    Anglo American in June spun off its South African thermal coal business into a new company and agreed to sell its stake in Colombia’s Cerrejon, moving to complete its transition out of assets that mine the most polluting fossil fuel.

    (Reporting by Clara Denina and Zandi Shabalala; Editing by Edmund Blair, Emelia Sithole-Matarise and Sonali Paul)

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