- Stronger production and prices drive record profit at Anglo American's 79-per-cent-owned subsidiary Anglo American Platinum
- Bernstein forecasts a 236¢ interim dividend for Anglo American, compared to 28¢ last year
Anglo American (AAL) shareholders could see a tenfold interim dividend jump on last year’s 28c (20p), after its Anglo American Platinum (SA:AMS) subsidiary announced it would pay out 100 per cent headline earnings to investors.
Anglo owns 79 per cent of Amplats, which mines and refines platinum group metals (PGMs) in South Africa.
The car industry drives platinum, palladium and other PGM demand, and even with the semiconductor shortage this year, the recovery in production after Covid-19 shutdowns has driven prices higher.
Amplats’ PGM basket price, an average price for the mix of metals it sells, rose 47 per cent on last year to $2,884 per ounce (oz).
The record cash profit of R63bn (£3bn) was driven by both these higher prices and Amplats more than doubling refined PGM production to 2.3moz. Production struggled last year due to operational difficulties, but the first half number was also ahead of the same period in 2019.
Bernstein analyst Danielle Chigumira said the 100 per cent payout ratio for the Amplats dividend “augurs well” for Anglo’s dividend, which will be announced on Thursday. Bernstein forecasts this at 236¢, compared to 28¢ last year, while analyst consensus is 180¢.
Amplats chief executive Natascha Viljoen said a focus for the year would be “building resilience across our business with the aim to increase our ability to handle and thrive through major disruptions”.
The miner dropped its high-end guidance for PGM metal-in-concentrate production (a different measure to refined production) from 4.6moz to 4.4moz, because of the “continuing impact of Covid-19 infection rates on production”.
