Anglo American profit more than halves, slashes dividend

Anglo American’s operating profit decreased to $3.0 billion (R52.81 billion) in the first half of 2023 from $6.7 billion (R118.13 billion) in the previous period. 

This was revealed in the company’s interim financial results for the six months ended 30 June 2023, which was released today.

Faced with “macro headwinds”, Anglo saw its basic earnings per share decrease by 56%, and its attributable free cash flow swing into the negative with a 130% decline.

Anglo American’s underlying EBITDA decreased to $5.1 billion (R89.8 billion) – a 41% decline from the year before. 

“Macro headwinds – principally, weaker prices for our products and input cost inflation – certainly weighed on our first half financial performance,” said Anglo chief executive Duncan Wanblad.

However, he said the company is on track to deliver on its full-year production guidance, including a significant anticipated volume increase in the second half. 

“Our focus on operational stability and cost control are our key margin levers, and we also expect to deliver annual efficiencies of $0.5 billion from across our full range of business support activities,” he said.

Anglo also saw its net debt increase to $8.8 billion (R155.12 billion) – a significant rise from $4.8 billion (R84.61 billion) in 2022.

Profit attributable to equity shareholders of the company also decreased by 66% to $1.3 billion (R22.91 billion).

The company’s big decrease in earnings saw it slash its interim dividend by 56% compared to the year before.

Anglo and its subsidiaries, like Kumba Iron Ore, have suffered significant losses due to cable theft at Transnet.

Kumba released its interim results this week for the six months that ended 30 June and said that increased cable theft on the Sishen-Saldanha rail line cost it roughly R6 billion in sales. 

Anglo American Platinum also recently reported a 71% drop in its headline earnings for the first half of 2023, cutting its dividend by more than 80%.