Mark Cutifani, Chief Executive of multinational mining company Anglo American (RODGER BOSCH/AFP/Getty Images)
- Anglo American banked $12.1 billion (R177.5 billion) in earnings in the first half of 2021
- Basic headline earnings per share rose to $4.22 compared to $0.49 in the first half in 2020
- The commodity price boom has helped mining firms ride out the Covid-19 storm with some companies making 100% returns to shareholders
Diversified mining giant Anglo American banked $12.1 billion (R177.5 billion) in earnings in the first half of 2021, reaping the rewards of the current commodity price boom.
The company said the earnings were driven by strong market demand and operational resilience, with profit to shareholders hitting $5.2 billion.
During the period to end of June, basic headline earnings per share rose to $4.22 compared to $0.49 in the comparative period. “The first six months of 2021 have seen strong demand and prices for many of our products as economies begin to recoup lost ground, spurred by stimulus measures across the major economies,” said CEO Mark Cutifani.
Basic earnings per share shot up 1000% to $4.18, compared to the first half in 2020, while profit attributable to equity shareholders went up 1,001%
Cutifani stated that growth was spurred by the performance of platinum group metals and copper, which have benefited from the demand from uses linked to the rising decarbonisation initiatives including the electric vehicles and the use of iron ore for greener steelmaking.
The company will return an additional $2 billion to shareholders, split equally between a special cash dividend and a share buyback. The payout will amount to a $4.1 billion cash return for the half year.
Free cash flow of $5.4 billion helped reduce net debt to just 0.1 of annualised underlying earnings at the end of June, said Cutifani. Anglo American subsidiaries, Anglo American Platinum and Kumba Iron Ore have also posted positive results for the first half of the year, in what has shown the mining sector’s resilience and handed the government impressive revenue.
The mining sector has emerged as one of the few industries that have not been largely affected by the Covid-19 pandemic, although companies had to reduce capacity in the early days of lockdown.
However, the commodity price boom has helped mining firms ride out the Covid-19 storm with some companies making 100% returns to shareholders.
Cutifani said the resilience of the business through a tough operating environment, supported by the prevailing market conditions, increased Anglo American’s mining earnings margin to 61%.
The company said it would be making a special contribution of $100 million to the Anglo American Foundation to fund health, social and environmental projects, ahead of the post-pandemic recovery phase.