Anglo American’s underlying earnings for the first half of 2016 fell by 23%, to US$698 million from the corresponding period of 2015. Underlying earnings per share was US$0.54 against US$0.70 a year earlier.
The company reported an actual loss for the period of US$682 million, an improvement from the US$2.7 billion loss a year earlier. Loss per share was US$0.63 compared with US$2.34 in H1 2015.
Group revenue was US$10.6 billion (a decline of 20% on 2015) on lower mineral commodity prices. For example, platinum prices fell by 24%, metallurgical coal prices by 23%, copper prices 15% and diamond prices by 14%. A weakening of the South African rand against the US dollar by 29% offset lower prices to a certain extent.
Operating costs were reduced to US$10.0 billion from US$13.2 billion a year earlier.
The main difference between actual loss and underlying earnings is financial impairments the company has made on certain assets it holds. In H1 2016, the company recorded an impairment of US$1.2 billion against its coal operations in Australia. In H1 2015, impairments, principally for the Minas-Rio iron ore mine, in Brazil, amounted to US$2.5 billion.
The De Beers diamonds division was the main contributor to underlying earnings with US$379 million. Other major contributing segments were iron ore and manganese (US$155 million) and coal (US$120 million).
The company did not pay a dividend in H1 2016 (H1 2015: US$0.32/share).
As at 30 June 2016, the company had a net debt position of US$11.7 billion, US$1.8 billion lower than a year earlier.
Anglo American’s underlying earnings fall in H1 2016:AAL