AngloGold Ashanti’s outgoing chief executive, Srinivasan “Venkat” Venkatakrishnan, left, chairperson Sipho Pityana, and executive director and chief financial officer Christine Ramon at the presentation of the company’s interim results in Johannesburg.Photo: Timothy Bernard/African News Agency (ANA)
JOHANNESBURG - AngloGold Ashanti turned around its profit for the six months to end June, on the back of good cost controls and a higher gold price. The group reported an after-tax profit of $43million (R626m) during the period, improving on last year's loss of $165m.

The adjusted earnings before interest, tax, depreciation and amortisation increased by 19percent to $723m, up from $610m compared to last year.

Outgoing chief executive Srinivasan Venkatakrishnan said the group continued to improve its portfolio, strengthen its balance sheet and increased productivity, all of which were the cornerstones of its strategy to improve free cash flow and returns over the long term.

“The business is in good shape - production is strong, costs are improving and our pipeline is well stocked with options,” Venkatakrishnan said.

The group reduced its net debt by 17percent year-on-year to $1.79billion as a result of proceeds for the sale of Moab Khotsong to Harmony Gold for $300m in February. AngloGold has reduced local production to curb losses.

Venkatakrishnan was presenting his last results following the group's announcement on July 23 that he will be replaced by Kelvin Dushnisky as chief executive at the beginning of September.

Venkatakrishnan, who will become the chief executive of Vedanta Resources, said the 2018 guidance was maintained at the previous levels reported, with production expected at the top end of the range and costs trending towards the lower end of the range.

Stark contrast

AngloGold Ashanti's performance was a stark contrast to Harmony Gold, which announced last week that it expected a decline of between 40 and 45percent in headline earnings per share for the year to end June, hit by soft gold prices and high production costs, while gold producer Gold Fields recently announced plans to cut 1100 jobs in its operations.

AngloGold said production from retained operations, excluding Moab Khotsong, Kopanang and TauTona mines, was 1.578million ounces (m/oz) at a total cash cost of $807 an ounce, compared to 1.517m/oz at a total cash cost of $740 an ounce as compared to last year.

All-in sustaining costs for these retained operations were $1005 an ounce during the period compared to $1030 an ounce last year.

The group said production from retained operations was up 4percent year-on-year.

However, revenue declined by 2percent to $2bn compared to last year's $2.1bn, while headline earnings per share came in at 24UScents a share, improving on headline loss a share of 22UScents.

AngloGold Ashanti shares closed 1.9percent lower at R105.65 on the JSE yesterday.

- BUSINESS REPORT