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Interim Results 2013

26 Jul 2013

Anglo American announces underlying EBITDA(1) of $4.7 billion and underlying operating profit(2) of $3.3 billion for the half year

Financial results impacted by weaker prices, partially offset by exchange gains and improved production

  • Group underlying operating profit of $3.3 billion, a 15% decrease
  • Underlying earnings(3) of $1.3 billion, underlying EPS of $0.98
  • Profit attributable to equity shareholders(4) of $0.4 billion
  • Net debt(5) of $9.8 billion at 30 June 2013
  • Attributable ROCE(6) of 11%

Safety

  • Eight employees and contractors lost their lives, and a further two remain missing, in work related incidents. Our safety programmes continue to drive for zero harm, focusing on operational risk management and learning from incidents

Disciplined capital allocation

  • Interim dividend maintained at 32 US cents per share, reflecting the Board’s commitment to maintaining an investment grade rating and to providing a base dividend, which will be maintained or increased through the cycle
  • 2013 capital expenditure reduced by $1.0 billion reflecting deferrals of spending in light of current market environment and more stringent capital allocation framework

Cash flow uplift of $1.3 billion p.a. targeted by 2016, with further potential to drive attributable(6) ROCE in excess of 15% target

  • New business process model to drive clear accountability and a step change in operational performance and project execution
  • Commercial and marketing overlay target of $500 million p.a. (including $100 million from supply chain)
  • Organisational structure and overhead savings of $500 million p.a. targeted
  • Rigorous capital allocation focused on value realisation – $300 million p.a. targeted savings from early stage project studies
  • Achieving the right balance between value adding growth and shareholder returns

Operational performance

  • Solid operational performance and strategic focus on margin preservation partially offset substantially lower commodity prices and the impact of industrial action
  • Kumba Iron Ore – continued strong performance at Kolomela offset the impact of Sishen strike and higher waste stripping
  • Metallurgical Coal – improved productivity and cost reduction initiatives drove an 18% decrease in unit costs at the Australian export operations partially offsetting a 21% decline in export metallurgical coal prices
  • Copper – improved efficiency and recovery in production from Los Bronces and Collahuasi resulted in a 7% increase in production, helping to achieve broadly flat unit costs, despite the high mining inflation environment
  • Platinum – restructuring proposals consultation process concluded with the South African Department of Mineral Resources (DMR), and the section 189 Labour Relations Act process resumed on 10 June 2013

Project update

  • Minas-Rio 26.5 Mtpa iron ore pellet feed (wet tonnes) (Brazil) – progress in line with plan; FOOS end of 2014
  • Grosvenor 5.0 Mtpa Metallurgical Coal (Australia) – capital costs of $1.95 billion, an increase of $0.25 billion primarily due to geotechnical changes; longwall production end of 2016

HIGHLIGHTS

US$ million, except per share amounts

6 months
ended
30 June
2013
6 months
ended
30 June
2012(8)
Change
Group revenue including associates and joint ventures(7) 16,193 16,408 (1)%
     
Operating profit including associates and joint ventures before special
items and remeasurements (2)
3,262 3,826 (15)%
Underlying earnings(3) 1,250 1,738 (28)%
Underlying EBITDA(1) 4,709 5,067 (7)%
Net cash inflows from operating activities 3,167 2,665 19%
Profit before tax(4) 1,994 3,035 (34)%
Profit for the financial period attributable to equity shareholders(4) 403 1,254 (68)%
Earnings per share (US$):      
  Basic earnings per share(4) 0.31 1.02 (70)%
  Underlying earnings per share(3) 0.98 1.41 (30)%
 Dividend per share 0.32 0.32 -
Attributable ROCE(6) 11% 14% (3)%

(1) Underlying earnings before interest, tax, depreciation and amortisation (underlying EBITDA) is operating profit before special items and remeasurements, depreciation and amortisation in subsidiaries and joint operations and includes attributable share of underlying EBITDA of associates and joint ventures. See note 2 to the Condensed financial statements.

(2) Underlying operating profit includes attributable share of associates’ and joint ventures’ operating profit (before attributable share of associates’ and joint ventures’ interest, tax and non-controlling interests) and is before special items and remeasurements, unless otherwise stated. See note 2 to the Condensed financial statements. For the definition of special items and remeasurements see note 4 to the Condensed financial statements.

(3) See notes 3 and 8 to the Condensed financial statements for basis of calculation of underlying earnings.

(4) Stated after special items and remeasurements. See note 4 to the Condensed financial statements.

(5) Net debt includes related hedges and net debt in disposal groups. See note 11 to the Condensed financial statements.

(6) Attributable ROCE is the annualised underlying operating profit on adjusted capital employed attributable to equity shareholders of Anglo American, and therefore excludes the portion of the annualised underlying operating profit and capital employed attributable to non-controlling interests in operations where Anglo American has control but does not hold 100% of the equity. Adjusted capital employed is the average of net assets excluding net debt and financial asset investments, adjusted for remeasurements of a previously held equity interest as a result of business combination and impairments incurred in the current year.

(7) Includes the Group’s attributable share of associates’ and joint ventures’ revenue of $1,788 million (six months ended 30 June 2012: $2,772 million). See note 2 to the Condensed financial statements.

(8) Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements. See note 1 to the Condensed financial statements.

View full PDF of this press release (1.24MB, link opens in a new window)

For further information, please contact:

Media Investors
UK UK
James Wyatt-Tilby Leng Lau
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8540
   
Emily Blyth Caroline Crampton
Tel: +44 (0)20 7968 8481 Tel: +44 (0)20 7968 2192
   
South Africa Sarah McNally
Pranill Ramchander Tel: +44 (0)20 7968 8747
Tel: +27 (0)11 638 2592  

Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations. The company’s mining operations, extensive pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe. www.angloamerican.com

Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 26 July, can be accessed through the Anglo American website at www.angloamerican.com.

Note: Throughout this results announcement, ‘$’ denotes United States dollars and ‘cents’ refers to United States cents; underlying operating profit includes attributable share of associates and joint ventures’ operating profit and is before special items and remeasurements, unless otherwise stated; special items and remeasurements are defined in note 4 to the Condensed financial statements. Underlying earnings, unless otherwise stated, is calculated as set out in note 3 to the Condensed financial statements. Earnings before interest, tax, depreciation and amortisation (underlying EBITDA) is underlying operating profit before special items and remeasurements, depreciation and amortisation in subsidiaries and joint operations and includes attributable share of underlying EBITDA of associates and joint ventures. Underlying EBITDA is reconciled to ‘Total profit from operations and associates’ and joint ventures in note 2 to the Condensed financial statements. Tonnes are metric tonnes, ‘Mt’ denotes million tonnes and ‘kt’ denotes thousand tonnes, unless otherwise stated. ‘Mct’ denotes million carats

Forward-looking statements
This announcement includes forward-looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Anglo American’s financial position, business and acquisition strategy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American’s products, production forecasts and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding Anglo American’s present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the availability of mining and processing equipment, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American’s most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the “Takeover Code”), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Nothing in this announcement should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share.

Certain statistical and other information about Anglo American included in this announcement is sourced from publicly available third party sources. As such, it presents the views of those third parties, though these may not necessarily correspond to the views held by Anglo American.

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