Annual Results 2008
20 February, 2009
Anglo American announces underlying earnings of $5.2 billion
Financial results
- Group operating profit(1) of $10.1 billion, with operating profit from core operations(2) up 10% to $9.8 billion
- Total Group underlying earnings(3) of $5.2 billion, down 9%
- Total Group underlying earnings per share of $4.36, down 1%
- Strong performances from Coal and Ferrous Metals, with increased production of coal and iron ore
- Total Group profit attributable to equity shareholders down 29% at $5.2 billion
- Significant input cost pressures partially mitigated by cost savings of $348 million
- Year end net debt(4) of $11.0 billion
- Committed undrawn bank facilities and cash(5) of over $7 billion at 31 December 2008
Decisive action and superior performance to position Anglo American through the cycle
- $2 billion target from cost saving and efficiency initiatives:
- Asset optimisation to deliver $1 billion contribution to operating profit by 2011
- Procurement and shared services savings on track for $1 billion by 2011
- 2009 capital expenditure reduced by more than 50% to $4.5 billion
- Major strategic world-class projects preserved (Los Bronces, Barro Alto,Minas-Rio)
- Flexible growth options retained
- Production growth from certain operations scaled back to meet lower demand outlook
- ready to make further cuts, as required
- Global headcount reduction of 19,000 under way, in line with revised growth plans
- Share buyback suspended
Dividend
- Dividend payments suspended; total dividend for the year of 44 cents per share
- Safeguarding balance sheet flexibility to preserve growth options
- Commitment to resume dividend payments as soon as market conditions allow
Delivering safe production
- Safety – good progress, with changes to safety practices delivering results:
- 17% improvement in Lost Time Injury rates, with trend continuing
- 33% reduction in the number of fatalities
| HIGHLIGHTS FOR THE YEAR ENDED 31 DECEMBER 2008 US$ million, except per share amounts |
Year ended 31 Dec 2008 |
Year ended 31 Dec 2007 |
Change |
|---|---|---|---|
| Total Group revenue including associates(6) | 32,964 | 35,674 | (7.6)% |
| Operating profit including associates before special items and remeasurements – core continuing operations(1)(2) | 9,765 | 8,894 | 9.8% |
| Operating profit including associates before special items and remeasurements – total Group(1) | 10,085 | 10,116 | (0.3)% |
| Underlying earnings for the year – total Group(3) | 5,237 | 5,761 | (9.1)% |
| EBITDA – total Group(7) | 11,847 | 12,132 | (2.3)% |
| Net cash inflows from operating activities – total Group | 8,065 | 7,264 | 11.0% |
| Profit for the year attributable to equity shareholders – total Group | 5,215 | 7,304 | (28.6)% |
| Earnings per share (US$):(3) | |||
| Basic earnings per share – total Group | 4.34 | 5.58 | (22.2)% |
| Underlying earnings per share – total Group | 4.36 | 4.40 | (0.9)% |
| Interim dividend (US cents per share) | 44 | 38 | 15.8% |
| Recommended final dividend | - | 86 | |
| Total dividend for the year | 44 | 124 | (64.5)% |
In 2007, total Group included the results of AngloGold Ashanti and the Paper and Packaging business (Mondi).
(1) Operating profit includes share of associates’ operating profit (before share of associates’ interest, tax and minority interests) and is before special items and remeasurements, unless otherwise stated. See note 4 to the condensed financial statements for operating profit on a total Group basis. For the definition of special items and remeasurements see note 6 to the condensed financial statements and see note 17 for information on discontinued operations.
(2) Operations considered core to the Group are Base Metals, Platinum, Ferrous Metals’ core businesses (Kumba Iron Ore, Scaw Metals, Samancor Manganese and Anglo Ferrous Brazil), Coal and Diamonds. See the summary income statement in the financial review of Group results for a reconciliation of operating profit from core operations to total operating profit.
(3) See note 9 to the condensed financial statements for basis of calculation of underlying earnings and see note 17 for information on discontinued operations (which contributed $284 million to underlying earnings in 2007).
(4) Net debt excludes hedges but includes the net debt in disposal groups. See note 11 to the condensed financial statements.
(5) After taking account of commercial paper maturing throughout 2009 of $1.1 billion.
(6) Represents total Group revenue (including the revenue of discontinued operations) and includes the Group’s share of associates’ revenue of $6,653 million (2007: $6,142 million). See note 3 and note 17 (for discontinued operations) to the condensed financial statements. Discontinued operations contributed revenue of $5,115 million in 2007.
(7) EBITDA is operating profit before special items, remeasurements, depreciation and amortisation in subsidiaries and joint ventures and share of EBITDA of associates.