JOHANNESBURG - Gold producer AngloGold Ashanti will double its dividend payout ratio due to an increase in profit margins and an ongoing reduction in borrowings and leverage, it said on Monday.
The company will now pay shareholders 20 percent of its free cash flow before accounting for growth capital expenditure, up from 10 percent previously, and will also double the frequency of payouts from the current annual dividend declaration, to semi-annual payments.
“This move demonstrates confidence in our ability to improve direct returns to shareholders whilst self-funding our growth projects and sustaining capital requirements,” interim chief executive officer Christine Ramon said in a statement.
The company said it had prioritised capital discipline and debt reduction over the past five years, reducing its adjusted net debt to adjusted earnings before interest, taxes, depreciation and amortisation ratio from 2.29 in September 2015 to 0.36 this year.
In its operational update for the quarter ended September 30, also published on Monday, AngloGold Ashanti said production increased by one percent year-on-year to 837,000 ounces, supported by solid performances across the operating asset base.
It estimated the impact on output from the Covid-19 pandemic during the third quarter at 18,000 ounces.
All of AngloGold Ashanti’s mines were now operating normally subject to updated Covid-19 protocols and various travel restrictions, except for Cerro Vanguardia in Argentina which was currently running at about 80 percent of mining capacity due to a continuing inter-provincial travel prohibition.
Production targets were still being achieved through processing existing stockpiles, the company added.
In line with historical trends, AngloGold Ashanti said it expected a strong finish to the year, especially at Geita in north-western Tanzania, as well as at its operations in Australia and Brazil.
“As we previously flagged during the year, Covid-19 has resulted in some capital expenditure deferrals across the portfolio. At Obuasi (in Ghana), we expect $70 million to $90 million of Phase 2 project capital rolling over into 2021,” it said.
AngloGold Ashanti is the third largest gold producer in the world and the largest on the African continent, and is listed on the Johannesburg, New York, Australian and Ghana stock exchanges.
African News Agency