Shares in Anglo American (LON:AAL) have lost more than one percent in London in today’s session, even as the blue-chip miner unveiled that it had returned to profit last year, following a surge in commodity prices. The group’s dividend meanwhile remains suspended with the company hoping to restore payments for the end of the current year.
As of 14:27 GMT, Anglo American’s share price had lost 1.10 percent to 1,345.00p as of 14:28 GMT, underperforming the broader London market, with the benchmark FTSE 100 index having slipped marginally lower and currently standing 0.23 percent in the red at 7,282.78 points. The group’s shares have soared more than 206 percent over the past year, and are up by some 15 percent in the year-to-date.
Anglo American announced in a statement today that it had made a profit attributable to equity shareholders of $1.6 billion last year, compared with a $5.6-billion loss for 2015 when the group was struggling alongside peers with the low commodity price environment. The miner also reduced its net debt by 34 percent to $8.5 billion, below its $10-billion target.
Anglo American updated investors on its dividend plans, saying that given the need to conserve cash and reduce debt, payouts to shareholders had remained suspended for last year. The company, however, expects to reinstate dividend payments for the end of the current year.
The group’s chief executive Mark Cutifani noted in the statement that with disposals for the purposes of deleveraging no longer required, the company was planning to retain its Moranbah, Grosvenor coal assets as well as its nickel assets. The blue-chip miner had previously said that it would focus on its diamonds, platinum and copper businesses.
City Index analyst Ken Odeluga told City A.M. that the miner’s shares had fallen today with investors waiting for more details on the group’s intention to upgrade its mining asset portfolio.
“The question in shareholders’ minds is ‘how sustainable is the pace of improvement?’ particularly with low hanging fruit in terms of costs and debt now largely out of the way,” the analyst pointed out. The newswire also quoted Hargreaves Lansdown’s George Salmon as commenting that Anglo American was “definitely looking more stable”, but that some investors would have been hoping it would show more commitment to its plans to become a leaner organisation focused on just three core assets.