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2013 Preliminary Results

14 Feb 2014

Anglo American announces 6% increase in underlying operating profit to $6.6 billion

Financial results reflect improved operational performance, with currency gains offsetting weaker prices

  • 6% increase in Group underlying operating profit(1) to $6.6 billion
  • Margin improvement: EBITDA margin increased by 2% to 29%; EBIT margin by 1% to 20%
  • Effective tax rate increased from 29% to 32%
  • 7% decrease in underlying earnings(2) to $2.7 billion; underlying EPS of $2.09
  • Special items after tax and non-controlling interest include impairments of $1.9 billion, principally in relation to Barro Alto ($0.7bn), Platinum portfolio review ($0.2bn), Michiquillay ($0.3bn) and Foxleigh ($0.2bn)
  • After total special items and remeasurements, loss attributable to equity shareholders of $961 million (2012: $1.5 billion loss)
  • Net debt(3) of $10.7 billion as at 31 December 2013 (2012: $8.5bn)
  • Attributable ROCE(4) of 11%, in line with 2012

Business performance improving to support operating profit growth

  • Improved operational performance, particularly in the fourth quarter, reflecting a greater focus on mining processes, costs and margins
  • Impact of lower commodity prices offset by weakening producer currencies
  • Kumba Iron Ore – safety stoppages and pit constraints at Sishen, partially offset by strong performance at Kolomela
  • Metallurgical Coal – record production, cost reductions and improved product mix more than offset by 24% fall in price
  • Copper – record production, led by Los Bronces’ fully ramped up Confluencia plant and higher grades and recoveries at Collahuasi, largely offset by lower realised prices
  • Platinum – higher sales volumes supported by rand depreciation, partially offset by input cost increases and lower prices across most metals
  • Diamonds – increased production reflecting improved asset performance and customer demand, with higher realised prices

Project update

  • Minas-Rio 26.5 Mtpa iron ore (Brazil) - 84% completed and FOOS (First Ore On Ship) target of end 2014; capital expenditure on track at $8.8 billion
  • Grosvenor 5.0 Mtpa metallurgical coal (Australia) – longwall production end of 2016; capital expenditure on track at $1.95 billion

Disciplined capital allocation

  • $6.3 billion capital expenditure for 2013. Guidance maintained at $7.0 to $7.5 billion for 2014 and expected to reduce in 2015 and 2016
  • Final dividend maintained at 53 US cents per share, bringing total dividends for 2013 to 85 US cents per share, reflecting the Board’s commitment to the rebased dividend

Safety

  • Regrettably, 14 employees and contractors lost their lives, and two others are missing, in work related incidents
  • LTIFR (lost-time injury frequency rate) reduced by 16% to 0.49, the lowest level recorded for the Group
  • We are elevating our focus on achieving zero harm in the workplace, through leadership behaviours at every level, business processes and further strengthening of major risk hazard assessments
HIGHLIGHTS
US$ million, unless otherwise stated
Year ended
31 Dec 2013
Year ended
31 Dec 2012(5)

Change
Group revenue including associates and joint ventures(6) 33,063 32,785 1%
Underlying operating profit(1) 6,620 6,253 6%
Underlying earnings(2) 2,673 2,860 (7)%
Underlying EBITDA(7) 9,520 8,860 7%
Net cash inflows from operating activities 6,792 5,919 15%
Profit/(loss) before tax(8)(9) 1,700 (171) -
Loss for the financial year attributable to equity shareholders of the Company(8)(9) (961) (1,470) 35%
Attributable ROCE%(4) 11% 11% 0%
Earnings per share (US$):
    Basic loss per share(8) (0.75) (1.17) 36%
    Underlying earnings per share(2) 2.09 2.28 (8)%

(1) Underlying operating profit is presented before special items and remeasurements and includes the Group’s attributable share of associates’ and joint ventures’ operating profit before special items and remeasurements, unless otherwise stated - see notes 2 and 4 to the Condensed financial statements. For the definition of special items and remeasurements, see note 5 to the Condensed financial statements.
(2) See note 8 to the Condensed financial statements for basis of calculation of underlying earnings.
(3) Net debt includes related hedges and net debt in disposal groups. See note 10 to the Condensed financial statements.
(4) Attributable ROCE reflects the realised prices and foreign exchange during the period, and in line with commitments made as part of Driving Value. Please refer to page 83-84 for the detailed methodology.
(5) Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements. See note 1 to the Condensed financial statements for details.
(6) Includes the Group’s attributable share of associates’ and joint ventures’ revenue of $3,721 million (2012: $4,105 million). See note 2 to the Condensed financial statements.
(7) Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before special items, remeasurements, depreciation and amortisation in subsidiaries and joint operations, and includes attributable share of EBITDA of associates and joint ventures. See note 2 to the Condensed financial statements.
(8) Stated after special items and remeasurements. See note 5 to the Condensed financial statements.
(9) For the year ended 31 December 2013, special items and remeasurements, including associates and joint ventures, before tax and non-controlling interests, amounted to a loss of $4,435 million (2012: loss of $5,847 million), and after tax and non-controlling interests, amounted to a loss of $3,634 million (2012: loss of $4,330 million).

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For further information, please contact:

Media   Investors  
UK South Africa UK Sarah McNally
James Wyatt-Tilby Pranill Ramchander Paul Galloway Tel: +44 (0)20 7968 8747
Tel: +44 (0)20 7968 8759 Tel: +27 (0)11 638 2592 Tel: +44 (0)20 7968 8718  
       
Emily Blyth   Caroline Crampton  
Tel: +44 (0)20 7968 8481   Tel: +44 (0)20 7968 2192  

Notes to editors:
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. Our portfolio of mining businesses meets our customers’ changing needs and spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals and minerals – copper, nickel, niobium and phosphates; and precious metals and minerals – in which we are a global leader in both platinum and diamonds. At Anglo American, we are committed to working together with our stakeholders – our investors, our partners and our employees – to create sustainable value that makes a real difference, while upholding the highest standards of safety and responsibility across all our businesses and geographies. The Company’s mining operations, pipeline of growth projects and exploration activities span southern Africa, South America, Australia, North America, Asia and Europe.
www.angloamerican.com

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