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2017 Interim Results

27 July, 2017

Dividend resumed as net debt reduced to $6.2 billion, driven by $2.7 billion free cash flow

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 $7 billion year-end target
  • Resumed dividend at 48 US cents per share for the first half, equal to 40% of first half underlying earnings*
    • Dividend policy to target pay-out of 40% of underlying earnings*
Six months ended
US$ million, unless otherwise stated
30 June 2017 30 June 2016 Change
Underlying EBITDA* 4,116 2,450 68%
Underlying earnings* 1,536 698 120%
Profit/(loss) for the financial period attributable to equity shareholders of the Company 1,415 (813)
Underlying earnings per share* ($) 1.19 0.54
Earnings per share ($) 1.09 (0.63)
Dividend per share ($) 0.48

Notes to the highlights and table are shown at the bottom of this section.

(1) Gearing is defined in note 14 to the Condensed financial statements.
(2) Copper equivalent is normalised for the sale of Kimberley Mines (De Beers), our niobium and phosphates business, Foxleigh and Callide (Coal), to reflect Snap Lake (De Beers) being placed onto care and maintenance, and the closure of Drayton (Coal).

Words with this symbol * are defined as Alternative Performance Measures. For more information on the APMs used by the Group, including definitions, please refer to the Alternative Performance Measures section of the Group’s Annual Report for the year ended 31 December 2016.

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For further information, please contact:

Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
Email: [email protected] Email: [email protected]
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Trevor Dyer
Email: [email protected] Email: [email protected]
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8992
South Africa Sheena Jethwa
Pranill Ramchander Email: [email protected]
Email: [email protected] Tel: +44 (0)20 7968 8680
Tel: +27 (0)11 638 2592
Ann Farndell
Email: [email protected]
Tel: +27 (0)11 638 2786

Notes to editors:

Anglo American is a globally diversified mining business. Our portfolio of world-class competitive mining operations and undeveloped resources provides the raw materials to meet the growing consumer-driven demands of the world’s developed and maturing economies. Our people are at the heart of our business. It is our people who use the latest technologies to find new resources, plan and build our mines and who mine, process and move and market our products to our customers around the world.

As a responsible miner - of diamonds (through De Beers), copper, platinum and other precious metals, iron ore, coal and nickel - we are the custodians of what are precious natural resources. We work together with our key partners and stakeholders to unlock the long-term value that those resources represent for our shareholders and for the communities and countries in which we operate – creating sustainable value and making a real difference.

www.angloamerican.com

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