Anglo American pays out record $4.1bn to shareholders for first half

Date: Jul 29, 2021

Global miner, Anglo American, on Thursday boosted its shareholder payout to a record $4.1 billion, sending its stock up almost 5% after bumper commodity prices lifted first-half profits to their best ever.

London-listed shares in Anglo, which hit their highest since 2008 in May, were up 4.6% by 0740 GMT. This was their loftiest since June.

Soaring prices for most of Anglo's products, including copper, iron ore and platinum group metals, helped the miner, which was hardest hit among its peers by COVID-19 lockdowns in many African countries, lift first-half profits to a record.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $12.1 billion for the six months to June 30, up from $3.4 billion in the same period in 2020, beating the $10.9 billion expected by analysts.

Rising costs hurt underlying EBITDA by $200 million, it said.

Anglo declared an interim dividend of 1.71 cents per share, up from 0.28 cents in 2020, totalling $2 billion, and a special dividend of 0.8 cents per share, or $1 billion. It also announced a $1 billion share buyback programme.

"I still don't think it's our finest hour, that is yet to come. From our point of view it's a good milestone," Chief Executive Officer, Mark Cutifani, told reporters after the results.

Net debt fell by 74% to $2 billion in the first half compared to a year earlier, reflecting high prices. "The underlying investment case at Anglo American remains strong, with differentiated high quality growth, better diversification vs. peers and increasing shareholder returns adds to this compelling mix," RBC Capital analysts said.

"Today's cost increases are likely to weigh (as they are doing across the industry albeit Anglo appears more exposed due to its more emerging markets-weighted asset base) but shares remain inexpensive," they said in a note.

Surging commodity prices have emboldened miners to dish out high shareholder payouts, with Rio Tinto on Wednesday being the first of the global miners to announce a record dividend after a blockbuster first half.

Anglo American in June spun off its South African thermal coal business into a new company and agreed to sell its stake in Colombia's Cerrejon, moving to complete its transition out of assets that mine the most polluting fossil fuel.



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