JOHANNESBURG – Anglo American said on Tuesday that it was in a stronger financial position following a year of performance improvements which had made it set a new production guidance 2 percent higher than the previous one.
Mark Cutifani, chief executive of Anglo American, said the group had completely transformed the quality of its asset portfolio and its performance as a whole over the last five years after disposing of some of its assets in South Africa and raising more than $4 billion (R57bn).
"We have created a highly competitive business, with Anglo American amongst the very best in the industry in terms of margin. We see considerable further opportunity ahead and continue to target $3bn to $4bn of incremental annual earnings before interest, tax, depreciation and amortisation (Ebitda) by 2022," Cutifani said.
"This will come from a combination of meeting or surpassing industry best-practice equipment performance across our operations; volume growth from existing and new operations, such as Quellaveco; and the deployment of our FutureSmart Mining technologies and digitalisation. It is these technologies that will transform how we mine, process and market our products, providing the next step change in our performance."
Cutifani was hosting a briefing for investors and analysts to provide an update on the group’s current and projected operational and financial performance covering guidance for the next three financial years, including capital expenditure, and an update on its broad range of organic growth options.
He said that Anglo American continued to improve its performance during 2018, and was now expecting production to be 2 percent above previous guidance and costs 5 percent below.
"We are also confident about the outlook, with production expected to increase by 3 percent in 2019, with cost inflation fully absorbed by our productivity and cost improvements. We expect a further 5 percent production increase in both 2020 and 2021," he said.
"In the last three years, we have reduced net debt by more than $9bn and paid almost $2bn in dividends to our shareholders in the last 18 months. We are now well positioned to drive enhanced returns through our capital allocation options, maintaining a strong balance sheet while delivering attractive shareholder returns and value-adding disciplined growth."
Cutifani said Anglo American’s portfolio spans the products and product qualities that will supply the needs of a cleaner, more electrified and richer world.
"We have a well-sequenced range of high returning, quick payback growth options, from life extensions in diamonds and metallurgical coal, to growth across our copper, diamonds and met coal businesses in particular," Cutifani said.
"Combined with our multistakeholder focus to create a truly sustainable business, we believe we are set to keep delivering on all fronts."