Global resources giant Anglo American has reported record underlying earnings of $2,5-billion in the half year to 30 June 2006, an increase of 47% over the previous period. The company said the high earnings were achieved against a backdrop of a favourable trading environment with strong metal prices and improved volumes forming the foundation to this environment.
The group also said $261-million in cost savings had been achieved in the first half through synergies, efficiencies and procurement. With mines globally facing ongoing cost pressure, the cost savings are notable.
Anglo announced interim basic earnings per share up 57,5% to $2, from $1,27 in the corresponding period in 2005.
“This has been a very successful six months, both in terms of the performance of Anglo American and the implementation of our strategy,” said CEO Tony Trahar.
“We have reduced our stake in AngloGold Ashanti, Tarmac’s restructuring is on track, the disposal process for Highveld Steel has been announced and plans are being developed to demerge Mondi. Further, we are announcing today the return of $5-billion to shareholders,” he added.
Trahar referred to these developments as “significant strides” as far as delivering on their strategy, simplifying the structure and focusing on the core mining portfolio went.
With operating profit up 52% to $4,6-billion and earnings before interest, tax, depreciation and amortisation 37% higher at a record $5,9-billion, Trahar said strong contributions had come from base metals and platinum as well as significant contributions from AngloGold Ashanti.
“Kumba’s results also showed a significant increase, coal recorded underlying earnings in line with the prior year, while paper and packaging and industrial minerals recorded lower contributions owing to continuing difficult market conditions,” said Trahar.
He added that underlying earnings at De Beers were below the prior year, mainly reflecting lower preference share income due to the June 2005 redemptions, and higher minorities as a result of the Ponahalo transaction which completed in April 2006.
Trahar said the interim dividend up 18% to 33 US cents was in line with the group’s progressive dividend policy. He added that strong operating cash flows, as well as the cash generation from non-core disposals, had led the company to agree to pay a special dividend of 67 US cents per share, which would be paid with the interim dividend.
Trahar added that the $2-billion share buy-back which commenced in March this year has almost been completed, with around $1,83-billion of shares having been repurchased as at August 4 2006.
“Given the continued strong underlying conditions in our business it has been decided to increase the buyback by a further $4-billion for this year,” said Trahar. – I-Net Bridge