The fire sale is officially cancelled. So strong was the rally in Anglo American 's (AAL) core commodities markets last year that the company beat its $10bn (£8bn) year-end borrowing target without having to flog much of its portfolio. In fact, a 37 per cent reduction in capital expenditure, a fallow year for the dividend and attributable free cash flow of $2.6bn allowed Anglo to reduce net debt by more than a third, to $8.5bn.
So with the balance sheet in better shape, Anglo has reversed its earlier decision to exit several markets. Moranbah and Grosvenor, the company's coking and metallurgical coal mines in Queensland, Australia, along with the group's nickel assets will now be kept and run for cash, "while being allocated capital to both protect and enhance value".
And in perhaps the ultimate sign of the group's turnaround, Anglo has pledged to return to the dividend list by the end of 2017, earlier than some market watchers had been expecting. Management also believes it can save a further $1bn this year from net cost and volume improvements, which should help with the target to return to an investment grade credit rating.
Prior to these results, analysts at HSBC were asking for full-year underlying earnings of $3.5bn and EPS of $2.69, falling to $2.4bn and $1.88 in 2018.
ANGLO AMERICAN (AAL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,354p | MARKET VALUE: | £17.5bn | |
| TOUCH: | 1,353-1,354p | 12-MONTH HIGH: | 1,423p | LOW: 400p |
| DIVIDEND YIELD: | nil | PE RATIO: | 14 | |
| NET ASSET VALUE: | 1474¢ | NET DEBT: | 35% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 28.7 | -0.2 | -117 | 85 |
| 2013 | 29.3 | 1.7 | -75 | 85 |
| 2014 | 27.1 | -0.3 | -196 | 85 |
| 2015 | 20.5 | -5.5 | -436 | 32 |
| 2016 | 21.4 | 2.6 | 124 | nil |
| % change | +5 | - | - | - |
Ex-div: na Payment: na £1=$1.24 | ||||
