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Anglo American PLC on Thursday cut its dividend after annual profit fell sharply, as the miner faces the ‘effects of dislocations’ in the global economy.
London-based Anglo slashed its final dividend for 2022 to $0.74, down 37% from $1.18. Total payout for 2022 tumbled by 60% to $1.98 from $4.99 in 2021.
Anglo reported pretax profit of $9.48 billion in 2022, down 46% from $17.63 billion in 2021.
Revenue fell by 15% to $35.12 billion from $41.55 billion, taking underlying earnings before interest, tax, depreciation and amortisation to $14.50 billion, down 30% from $20.63 billion.
This decline in revenue and profitability reflected inflationary headwinds and higher energy prices, combined with lower production volumes. This raised production costs amid reduced prices for much of the group’s output.
Operating costs increased to $25.88 billion, 8.0% higher than $23.96 billion in 2021.
Anglo American Chief Executive Duncan Wanblad said the company continued to feel the ‘effects of dislocations’ in the global economy on its business in 2022 - in energy, and across supply chains and labour markets.
‘Extreme weather has disrupted the lives of so many, with exceptional rainfall also setting back several of our operations, while the energy crisis caused policymakers to react to mitigate sharply higher inflation,’ Wanblad said.
Total platinum group metal production decreased by 6.3% to 4.02 million ounces from 4.29 million ounces, principally due to lower grades at Mogalakwena and the impact of planned infrastructure closures at Amandelbult in South Africa.
Iron ore production dropped by 7.1% to 59.3 million tonnes from 63.8 million tonnes, but total copper production of 664,500 tonnes increased by 3% from 647,200 tonnes.
Nickel production declined by 4.6% to 39,800 tonnes from 41,700 tonnes, while steelmaking coal production was in line with the prior year at 15.0 million tones from 14.9 million tonnes.
De Beers’ rough diamond production increased by 7.1% to 34.6 million carats from 32.3 million carats, reflecting strong operational performance and higher planned levels of production to meet continued strong demand for rough diamonds, particularly in the first half of the year.
Anglo American expects diamonds production for 2023 to range between 30 millionand 33 million carats, while copper output is guided to rise to between 840,000 and 930,000 tonnes.
Annual PGM output is projected to decline to between 3.6 million and 4.0 million ounces, while iron ore production guidance ranges between 57 million and 61 million tonnes.
The 2023 guidance for steelmaking coal is between 16 million and 19 million tonnes.
Anglo American shares were down 1.3% at 3,046.50 pence in London on Thursday morning. They were down just 0.1% at R 669.19 in Johannesburg.
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