Anglo American earnings down amid market volatility

Global mining company Anglo American has generated an underlying EBITDA of $8.7 billion in the first six months of the year, the second highest half-year amount, albeit a 28 per cent decrease compared to the record first half of 2021.

Attributable free cash flow of $1.6 billion was driven largely by strong prices in the first quarter that declined towards the end of the period in tandem with increasing cost inflation.

It made a $1.5b interim dividend of $1.24 per share in line with its 40 per cent payout policy.

Anglo American chief executive Duncan Wanblad said the company’s differentiated combination of portfolio quality and growth optionality, underpinned by its operating model and innovation track record, continued to position it strongly through the current market volatility and longer term cycle.

“Our unwavering focus is on driving consistent performance across our operations – which starts with the safety and health of our employees – and progress towards our full suite of sustainability ambitions,” he said.

“As we progressed through the first half, we began to regain operational momentum while also adjusting to the considerable challenges posed by COVID-related absenteeism, disrupted supply chains and logistics corridors, weather extremes and geopolitically-led economic volatility.

“Despite those operational challenges – in steelmaking coal and iron ore in particular –that reduced our planned production output, our return on capital employed of 36 per cent stayed well above our targeted 15 per cent through-the-cycle return and our mining EBITDA margin remained at a healthy 52 per cent.

“Our commitment to capital discipline and to a strong and flexible balance sheet is paramount to remain resilient to the external environment and retain optionality for value-adding growth.

“At the end of June, net debt of $4.9 billion, or 0.3 times annualised underlying EBITDA, reflects the cash generation of the business, partially offset by our investments in our existing assets and future growth.

“We continue to make progress on our long term safety journey. There is no doubt, however, that the operational changes necessary to help protect the health of our employees during the last two years require us to apply additional targeted effort to regain our momentum of continuous improvement.”

Looking ahead, Wanblad said growing the value of the business by progressing asset development options was the foundation of the organic margin-enhancing volume growth potential of 30 per cent over the next decade.

With significant operations in Queensland, Anglo American is the world’s third largest seaborne exporter of metallurgical coal. It has two open cut and three underground metallurgical coal mines in Queensland’s Bowen Basin, along with additional joint venture interests and growth projects.


Editor of industrial titles and mastheads with Prime Creative Media. Publications include Rail Express and Australian Mining (web content).
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