Anglo American share price: Miner swings to annual loss

on Feb 13, 2015
Updated: Oct 21, 2019

The recent commodity rout has prompted Anglo American (LON:AAL) to write-down the value of certain assets by $3.9 billion, pushing the FTSE 100-listed company into the red for the year ended 31 December 2014.

Anglo said in a statement today that it had delivered on all its major commitments for 2014 – operational performance, project delivery and portfolio restructuring targets. However, the group’s underlying profit before interest and tax (EBIT) fell 25 percent to $4.9 billion due to sharply weaker commodity prices, which were partially offset by foreign exchange gains and increased production and sales.

“Our diversified product portfolio provided us with a degree of insulation from the particularly sharp price falls for the bulk commodities of iron ore and coal, albeit in an environment where weaker commodity prices accounted for USD2.4 billion of underlying EBIT reduction,” said CEO Mark Cutifani.
Anglo also announced today that it had booked impairments totaling $3.9 billion, of which $3.5 billion were attributable to the company’s Minas Rio iron ore mine in Brazil. Along with a six percent decline in annual revenues to $30.98 billion, the charges pushed the company to a £2.5 billion net loss for the year. Anglo American suggested in late January that it would have to cut several billions of dollars off the value of some of its assets, following a torrid year and the uncertain outlook for commodities prices following China’s economic slowdown.

Despite the group’s downbeat annual performance, Anglo maintained its dividend at $0.85 per share. Looking ahead, Cutifani said: “In the immediate term, I expect tough trading conditions to prevail during 2015, but we are determined to continue to build on our already very significant operational improvements, drive towards an effective and efficient organisation and culture, and to be unwavering in our capital discipline.”
Anglo American’s share price opened around three percent higher today. As of 08:05 GMT, the stock was changing hands at 1,195.31p –2.70 percent up intraday. According to the FT, as of 6 February 2015, the consensus forecast amongst 51 polled investment analysts covering Anglo American has it that investors should hold their position in the company.
As of 08:29 GMT, Friday, 13 February, Anglo American plc share price is 1,165.50p.

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