Anglo American PLC's (LON:AAL) boss said the miner's most pressing challenge is the safety of its employees after a number of fatalities in 2018 as the firm reported solid full-year results but trimmed its dividend payout, Mark Cutifani, Anglo American's chief executive said: "No degree of financial performance is worth a life, however, and in 2018, five of our colleagues tragically died in workplace safety incidents. The safety of our people is always front of mind and our determination to reach and sustain zero harm is our most pressing challenge." Five of the FTSE 100-listed firm's employees lost their lives in South Africa in 2018, two in each of the group’s Platinum Group Metals and Coal businesses and one in its Diamonds business. In response, the group launched an Elimination of Fatalities Taskforce.
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Cutifani's comments came in his statement accompanying Anglo American's results for 2018 which saw a 4% increase in underlying earnings (EBITDA) to US$9.2 bln, with more than a third of that total coming from coal at US$3.2 bln, while copper contributed almost US$1.9 bln, and its diamond mining unit De Beers made US$1.25bln. The group's underlying earnings were marginally lower at US$3.2 bln, compared to US$3.3 bln in 2017, as a result of increased depreciation and amortisation charges. Anglo American's boss said: "Our commitment to disciplined capital allocation has helped strengthen our balance sheet by more than $10bln over three years, with net debt reduced to $2.8bln at the end of 2018. This strong financial result derives from our continued productivity improvements in the underlying operations and better than expected prices for many of our products. On the group’s outlook, Cutifani added: “Looking forward, we see significant further potential and by 2022, we are targeting an additional $3-4 billion annual underlying EBITDA run-rate improvement, relative to 2017." The miner proposed a final dividend of $0.51 per share, equal to 40% of second-half underlying earnings, taking its total payout from 2018 to $1.00 per share, down from the $1.02 paid a year earlier. “The dividend’s gone backwards this year, despite net debt to EBITDA standing at just 0.3 times – meaning it could easily smooth over a shortfall in profits. That raises questions about what Anglo plans to do with one of the strongest balance sheets in the sector,” commented Hargreaves Lansdown’s analysts in a note to clients. They added: “M&A’s a possibility – especially since the plan to focus on ‘consumer commodities’ like copper and diamonds has gone very quiet recently. Coal was the largest contributor to profits this year, and you don’t get much less consumer than that – especially as the group still has a large portfolio of thermal coal assets which are particularly polluting.” In afternoon trading on Thursday, Anglo American shares were 0.7% lower at 2,005p. -- Adds analyst comment, share price --