AngloGold Ashanti posted a worse-than-expected 17% fall in second-quarter adjusted profit, hit by stronger currencies and more exploration costs, and said its chief executive Bobby Godsell would retire.
AngloGold, the world’s third biggest gold producer, said on Tuesday Mark Cutifani from Brazil’s CVRD Inco would become new chief executive when Godsell retires at the end of September.
Cutifani is chief operating officer at CVRD, where he is in charge of the group’s global nickel business.
Godsell’s retirement marks the second CEO departure in as many days from a company under the umbrella of mining group Anglo American, where new CEO Cynthia Carroll has been restructuring. On Monday, Anglo Platinum CEO Ralph Havenstein said he would step down at the end of August.
AngloGold said adjusted headline EPS, excluding non-realised financial effects from derivatives, dropped to 29 US cents from 35 cents the previous quarter.
South African gold companies and investors traditionally compare results quarter-on-quarter rather than year-on-year.
The result was below expectations for a rise to 36 cents, according to the average forecast by nine analysts surveyed by Reuters. Their estimates were in a range of 32 to 40 US cents.
AngloGold shares, which have shed around 10% so far this year, rose 1,46% to R300,52 by 7.17am GMT, versus a 1,22% increase in the gold mining index.
”The broader market is stronger, [and] if you look at other gold shares, they’re up. There’s an element of short-covering coming through after the market took punishment last week and this is setting aside the fundamentals for now,” said a Johannesburg-based trader.
While on the face of it, the result and Godsell’s departure did not appear positive, the general market was in buying mode after last week’s sell-off, the trader said.
Strong currencies
”The reduction quarter-on-quarter was primarily due to stronger local operating currencies, higher exploration spend and continued hedge book reduction,” an AngloGold statement said.
The hedge book — representing gold sold in advance to lock in prices — declined to 8,75-million ounces from 9,59-million as the firm delivered into maturing positions, it added.
The company has been seeking to cut its hedge positions, most of which were agreed in previous years when prices were lower and which dampen income.
The firm sold its gold during the quarter for $605 per ounce, up $3 from the previous quarter but 9% lower than the average spot price of $666 per ounce.
AngloGold, 42% owned by Anglo American, said gold production rose 2% to 1,35-million ounces, lower than a company forecast of 1,39-million ounces. Third quarter output was forecast to increase to 1,48-million ounces.
Total cash costs rose $1 per ounce to $333 per ounce. – Reuters