Anglo American share price declines as company holds investor day

on Dec 9, 2014
Listen, Tuesday, December 9: Anglo American (LON:AAL) today held a presentation for investors and analysts. Speaking at the event, the mining company’s chief executive, Mark Cutifani, said that Anglo had delivered on its major commitments to shareholders and had turned around a number of its priority operations over the past year, as it looked to divest a number of assets to allow it to concentrate on its more attractive projects.

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“A number of sales processes are under way,” the CEO said. Cutifani further revealed that the group was considering selling a couple of Australian coal assets. “We have also indicated, when talking about some of the coal assets in South Africa, that we have just started to talk with stakeholders in terms of domestic supply on the thermal coal side,” the chief executive said in a call with journalists ahead of the company’s investor day.
Anglo noted that it continued to keep capital expenditure down whilst still attempting to grow. It had cut its capital expenditure guidance for 2014 by $500 million to $800 million and plans to slash a further $1.0 billion in 2015, which would see the company spend between $5.2 billion and $5.5 billion, with further cuts expected in the following years, the miner revealed.
By 2017, Anglo is targeting productivity to improve by 80 percent from its portfolio. Over the last year, Anglo also has improved production performance in every one of its businesses, with 71 percent of its priority assets performing above targets and with the other projects expected to follow.
In addition, the FTSE 100-listed company said it was aiming to boost its return on capital employed (ROCE) — a measure of the value a company gets out of its assets — to at least 15 percent by 2016, from 11 percent last year. “Current market consensus prices for 2016 lead us to a 12 percent ROCE in 2016,” Cutifani stated.
Anglo American’s share price has been trading in negative territory so far today, amid a wider decline in the sector. As of 13:26 GMT today, the stock was changing hands at 1,218.00p – 2.09 percent down intraday. According to the Financial Times, as of 3 December 2014, the consensus forecast amongst 56 polled investment analysts covering the FTSE 100-listed miner has it that investors should hold their position in the company.


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