AngloGold Ashanti CEO, Alberto Calderon, yesterday insisted that the JSE-listed gold miner was “seeing good progress in a number of places” despite its December 2022 full-year profits and earnings halving, contenting with inflation and trapped dividends in Argentina which all dented investor sentiment.
On the JSE, shares in AngloGold shed as much as 7.53% to trade at R307.01 at 4.30pm. Investors, who appeared nerved by the company’s plunge in full-year profits and earnings, were unmoved by the gold miner’s decision to double its dividend payment for the period.
Basic earnings in AngloGold for the year to end December amounted to $297 million (R5.4 billion) or $0.71 per share, 52% lower and sharply contrasting the previous year’s profitability attributable to shareholders of $622m or $1.48 per share.
The company has attributed the lower basic earnings per share out-turn “to the impact of the impairments” suffered at the Córrego do Sítio mining complex, the Cuiabá mining complex and the Serra Grande mine in Brazil.
The company also blamed “higher operating and exploration costs, higher finance costs and foreign exchange losses, lower by-product revenue and lower equity-accounted joint venture income for the plunge in basic earnings”.
With profitability in the company partially offset by higher gold sales, lower tax expenses and reduced care and maintenance expenditure at Obuasi as compared to 2021, Calderon exhibited confidence in the company’s prospects.
“We’re seeing good progress in a number of places which confirm we’re on the right track. It’s been a year of significant progress … we delivered on our production and cost commitments to the market and have begun to regain cost competitiveness,” said Calderon.
As a show of confidence in what the company is doing, Calderon has shut the door on merger and acquisition activity for the company, saying AngloGold preferred to press on with how it was structured and operating. He said this as Newcrest rejected Newmont’s $17bn offer, which has, however, ignited industry talk about consolidation and fresh merger and acquisition deals in the gold sector.
“We will stick to what we are doing,” Reuters quoted Calderon saying, adding that it was “very difficult” to add value through merger and acquisition activity in the gold sector at the moment. “Being able to justify a premium is, I’m not saying impossible, but it is difficult.”
Gold production for the full year period stood at 2.74 million ounces, an 11% improvement on the prior year. This had buoyed the company as it met its guidance for total capital expenditure and all-in sustaining costs while total cash costs ended less than 1% above the guidance range amid higher inflation.
Adjusted Ebitda earnings marginally lowered to $1.79bn while free cash flows of $657m compared well to $104m a year earlier. AngloGold subsequently paid a dividend of $194m for the period, with its balance sheet remaining “in a solid position after funding capital expenditure (and) two property acquisitions” in Nevada.
“There was approximately $2.5bn in liquidity, including cash and cash equivalents of $1.1bn, at year end,” the company said.
In December 2022 the Argentinean Central Bank approved payment of $18m in trapped dividends attributable to AngloGold. However, there are additional approvals that are pending although “the cash remains fully available for operational and exploration” requirements.
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