Anglo profits soar

ANGLO American’s half-year profit has surged by 263% and CEO Mark Cutifani said he was happy with the company’s turnaround but there was more to do.
Anglo profits soar Anglo profits soar Anglo profits soar Anglo profits soar Anglo profits soar

Mark Cutifani

Kristie Batten

Underlying operating profit dropped 10% to $US2.9 billion ($A3.08 billion) for the six months to June 30, with the iron ore and manganese division largest contributor, posting an underlying operating profit of $1.22 billion.

Cutifani said weaker commodity prices impacted earnings by $1 billion, offsetting higher volumes and a 2% drop in cash costs.

“The diversification in our portfolio has been helpful,” he said.

Underlying earnings rose by 3% to $1.2 billion on revenue of $16.1 billion.

The profit before tax was up 48% to $2.9 billion, while the profit attributable to shareholders jumped 263% to $1.4 billion.

Cutifani noted that performance was “patchy” across some divisions, though all sectors of the business posted productivity improvements, aside from platinum, which was hit by a five-month strike.

“We’re getting the basics right,” he said.

“There’s been good progress on the things that we view as important.”

Attributable return on capital employed (ROCE) dropped 1% to 10%, still a way off the target of 15% Cutifani set when he took over as CEO last year.

“Anything under 15% for me is unacceptable,” he said.

While noting that he was unhappy with that aspect of the result, Cutifani said pricing and inflation wiped 3% off ROCE, while the platinum strike shaved 1% off.

“To qualify that, I’m happy with the progress we’re making to close that gap,” he said.

The company has a long-term net debt target of $10-12 billion with debt totalling $11.5 billion at the end of June.

Meanwhile, Cutifani said the 26.5 million tonne per annum Minas-Rio iron ore project remained on track for first ore on ship by the end of the year.

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