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Anglo American dividend halves as earnings tumble amid uncertain outlook

Revenue and underlying earnings fell by 16% and 39% respectively

Anglo American PLC -

Anglo American PLC (LON:AAL) interim dividend halves as earnings tumbled after a challenging half-year.

The distribution, which is based on 40% of earnings, has been set at US$0.28 per share after underlying earnings (EBITDA) dropped 39% to US$3.3bn.

Revenue slipped 16% to US$12bn in the six months to June 30 while net debt spiked to US$7.6bn from US$4.6bn in December.

READ: Anglo American goes from 60% to 90% of production capacity during second quarter

Operations generated inflows of just US$1.2bn from US$3.4bn a year ago, Shore Capital noted, expressing “particular concern”.

“This was half of the US$2.4bn of investing outflows. It was only because of US$1.3bn of net financing inflows that the cash balance remained flat at US$6.3bn,” analysts commented.

De Beers is challenged by ongoing restrictions to travel in southern Africa and the risk of further Covid-19 cases in Indian diamond cutting centres.

Production guidance remains unchanged at 25-27mln carats, subject to continuous review based on coronavirus disruption as well as the timing and scale of the recovery in demand.

The outlook for copper, platinum and palladium was also the same at 620,000-670,000 tonnes, 1.5-1.7mln ounces and 1-1.2mln ounces respectively.

Guidance for metallurgical coal was revised to 16-18mln tonnes from 19-21mln tonnes due to the temporary closure of Australia’s Grosvenor mine in May after five people were seriously injured after a gas blast.

Shares shed 3% to 1,908.6p early on Thursday.

Quick facts: Anglo American PLC

Price: 2311.5 GBX

LSE:AAL
Market: LSE
Market Cap: £31.51 billion
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