Anglo American (LON:AAL) has updated investors on its interim performance.
Highlights from the company statement:
Mark Cutifani, Chief Executive of Anglo American, said: "The benefits of our relentless focus on driving efficiency through the operations and on upgrading the quality of our portfolio have resulted in a step-change in operational performance and profitability. In the first half, we have delivered a further 20% increase in productivity, a 68% increase in underlying EBITDA and $2.7 billion of attributable free cash flow - the outcome of extensive self-help work and tightly controlled capital expenditure, within a stronger price environment.
"We have nearly halved our net debt to $6.2 billion over the past year to take us well below our year-end target of $7 billion. Our materially improved balance sheet strength, with gearing(1) at 19% and net debt to annualised EBITDA of 0.8x, has supported the decision to resume dividend payments six months early, establishing a pay-out policy at a targeted level of 40% of underlying earnings. This equates to a dividend payment of 48 US cents per share for this half year.
"Looking forward, our focus will continue to be on improving operational performance and converting production and improving costs into consistent cash flow generation, while maintaining strict capital allocation discipline. We are now in a position to consider value accretive growth options and capital returns from within our substantial undeveloped mineral endowment."
Highlights - six months ended 30 June 2017
· Generated underlying EBITDA* of $4.1 billion, a 68% increase (H1 2016: $2.5 billion)
- Underlying EBITDA margin increased by additional five percentage points vs. FY 2016
· Profit attributable to equity shareholders of $1.4 billion (H1 2016: $0.8 billion loss)
· Delivered cost and volume improvements of $0.6 billion - on track to meet $1 billion target for full year
- Production volumes increased by 9% (Cu eq.)(2)
· Attributable free cash flow* of $2.7 billion (H1 2016: $1.1 billion)
· Reduced net debt* by 27% to $6.2 billion (FY 2016: $8.5 billion), ahead of $7 billion year-end target
· Resumed dividend at 48 US cents per share for the first half, equal to 40% of first half underlying earnings*
- Dividend policy to target pay-out of 40% of underlying earnings*