AngloGold flags a two-fold hike in headline earnings
JOHANNESBURG - ANGLOGOLD Ashanti, the world's third-largest gold producer, yesterday forecast a two-fold increase in headline earnings for the year ended December 2020 on the strong bullion price despite the lower output following the sale of its South African assets and the impact of Covid-19 on its operations.
The group flagged headline earnings of between $962 million (R14.2 billion) and $1.037 billion, compared with $379m a year earlier, and said it expected headline earnings a share to be between US 229 cents and US 247c compared to US 91c in 2019.
Total basic earnings from continuing operations were likely to be between $910m and $982m, up from $364m a year earlier, resulting in total basic earnings per share from continuing operations of between US 216 cents and US 233 cents from US 87 cents in 2019, said AngloGold.
The group cashed-in on the 27 percent surge in the gold price, helped by the weaker local currencies across its operating jurisdictions and the $110m higher joint venture income mainly from the Kibali mine in the Democratic Republic of Congo.
AnglogGold also said the $47m of care and maintenance costs incurred at Ghana's Obuasi mine in the comparative period were not repeated in the current period, helping to boost earnings.
However, the earnings were offset partly by the $69m, or US 16c per share derecognition of the remaining deferred tax assets after the sale of the South African operations to Harmony Gold Mining Company and the discounting of the Argentine export duties receivable resulted in a decrease in earnings of $15m.
AngloGold sold its sole remaining South African operations, Mponeng, the world's deepest, and Mine Waste Solutions, to Harmony for $300m in efforts to streamline its portfolio.
The group said production would fall to 3.047 million ounces, compared to 3.281 million ounces in 2019, with the decline in production mainly due to the sale of the South African operations and the impact of the Covid-19 pandemic on production.
“AngloGold Ashanti delivered a solid production performance for the year,” said the group.
The Geita mine in Tanzania posted a record performance and there were steady performances at Kibali, Iduapriem in Ghana, Siguiri in Guinea, Sunrise Dam in Australia, and AGA Mineração which helped offset declines in production at Tropicana in Western Australia, Cerro Vanguardia in Argentina and Serra Grande in Brazil.
AngloGold Ashanti shares rose 0.12 percent to close at R343.80 on the JSE yesterday.