Anglo American has reported a significant loss of R58 billion for the year ending December, primarily due to R72 billion in impairments, including a substantial amount related to De Beers. Despite the loss, the company achieved its full-year production targets. Underlying earnings decreased by 15% to R161 billion, although the profit margin remained stable at 30%. Revenue also declined by 11% to R513 billion. Headline earnings per share dropped significantly, and the final dividend was reduced by a third.
The financial results were mainly affected by lower prices for iron ore, platinum group metals (PGMs), and steelmaking coal, along with challenging conditions in the diamond market. These negative impacts were partially offset by higher copper prices and cost-saving measures. Average market prices for Anglo’s products fell by 10%, impacting earnings by R28 billion. Iron ore prices saw a 22% decrease, PGMs fell by 11% (with rhodium and palladium experiencing particularly sharp declines), and steelmaking coal prices dropped by 11%. However, copper prices increased by 8%.
CEO Duncan Wanblad stated that Anglo is undergoing a transformation to become a higher-margin mining company, focusing on copper, iron ore, and crop nutrients. He highlighted strong operational performance, cost reductions of R24 billion, and progress in simplifying the company’s portfolio. Anglo has agreed to sell its steelmaking coal business for up to R90 billion and its nickel business for up to R9 billion. The demerger of Anglo American Platinum is expected in June, with Anglo retaining a minority stake. Wanblad also mentioned the ongoing efforts to separate De Beers and improve its long-term prospects.