Anglo H1 earnings hit by fertiliser impairment, aims for coal disposal by 2025

Anglo American said on Thursday that it remains on course with its asset disposal plans, with a deal to sell its steel-making coal operations Australia seen by early 2025.

The company also said in its interim results that it had taken a $1.6-billion write-down on its Woodsmith project to produce fertiliser in the UK because of the decision to slow down its development. 

That write-down resulted in a $700-million loss attributable to equity shareholders and a 3% decline in underlying Ebitda (earnings before interest, taxes, depreciation and amortisation) to just shy of $5-billion. 

It all adds up to basic underlying earnings per share of $1.06, a 25% decline on the same period last year, and an interim dividend of 42 US cents per share. 

“We are moving at pace to create a much more agile and structurally profitable mining company focused on our exceptional quality copper and premium iron ore businesses, which both continue to perform very strongly, while maintaining our growth optionality in crop nutrients,” CEO Duncan Wanblad said in a statement. 

“We are committed to completing the key elements of this transformation by the end of 2025, creating a simpler, highly valued mining company with extensive growth options and considerable strategic flexibility.”

Anglo’s aim to trim down and focus on copper, iron ore and fertiliser comes in the face of headwinds for its coal, diamond and platinum group metals operations.

The company’s metallurgical coal mines in Australia are profitable, but the company is determined to become greener as well as leaner. A deal on that front is foreseen by the end of 2024 or the start of 2025.

De Beers may prove a tougher sell as demand for natural diamonds has fallen in the face of global economic uncertainty, changing consumer preferences and competition from lab-grown gems.

The demerger of Anglo American Platinum (Amplats) remains on track with a secondary listing planned for London to tap additional sources of capital.

Read more: Amplats demerger on track as it plans secondary listing in London

Anglo’s restructuring was announced in May in the heat of its efforts to repel a takeover attempt by Australian mining giant BHP.

Read more: Anglo to ditch Amplats, De Beers and steelmaking coal as it fends off BHP’s advances

The company that emerges from this may be slimmed down and more profitable in the long run, but its copper assets are likely to keep it in the crosshairs of other suitors. DM