Johannesburg - Anglo American reported profit more than
doubled last year amid a recovery in commodities, leading the mining giant to
say it no longer needs to sell assets to reduce debt.
The results, which exceeded analysts’ estimates, show
Anglo’s reversal of fortune from last year when investors were questioning
whether the company could survive tumbling metals prices. Anglo aims to return
to an investment-grade credit rating this year and pay a dividend in 2018.
“We got there. We delivered it. We do not need to sell
assets to address the balance sheet issues,” CEO Mark Cutifani said during a
call after the results. “If any assets go from here, it will be on the basis of
a portfolio adjustment.”
Bigger profits and a stock price that tripled last year
show Anglo’s turnaround program, unveiled during the depths of the commodities
crisis, has worked. To stay afloat in 2016, Anglo scrapped its dividend and
pledged to shrink its business to a fraction of its former size by selling
mines and focusing on just three core commodities: platinum, copper and
diamonds.
Read also: Anglo hold off on asset sale
The stock added 2 percent to 1 387.50 pence as of 8:01
a.m. in London.
Anglo reported underlying earnings of $1.72 a share in
the year ended Dec. 31, compared with 0.64 cents a year earlier. That compares
with an average analyst estimate of $1.39 a share.
Net debt was reduced to $8.5 billion, well below its
target of $10 billion. Anglo plans to keep reducing debt, with a new goal of
below $7 billion this year, the CEO said.
The company is “happy to keep” its South African assets,
including Kumba Iron Ore and thermal coal mines given the improved business
environment, Cutifani said. The assets had previously been marked for sale.
Iron ore is up 80 percent in the past year.
Anglo is aiming for a portfolio of 30 core assets, down
from 40 today, Cutifani said on a call. That’s a big change from last year,
when the company said it only wanted 16 core mines