By Christian Moess Laursen


Anglo American's trimmed its dividend after full-year profit declined more than expected and it booked $2.1 billion in impairments as it grapples with weak commodity markets across its portfolio.

The multinational, diversified miner said Thursday that its net profit for 2023 dropped 94% to $283 million on year due to impairments from its diamond and nickel businesses and lower prices for platinum and diamonds.

This significantly missed analysts' expectations of $2.44 billion, according to FactSet.

Underlying earnings before interest, taxes, depreciation and amortization--the company's preferred profit metric--fell to $9.96 billion from $14.495 billion, with the largest contributions coming from copper and iron ore at $3.23 billion and $4.01 billion, respectively. Analysts had expected group earnings of $9.83 billion, according to FactSet.

Revenue, meanwhile, fell to $30.65 billion from $35.12 billion, lower than analysts' forecasts of $30.83 billion. Net debt widened to $10.615 billion from $6.92 billion.

In December, Anglo American--one of the world's largest miners by revenue--announced it would cut $1 billion in costs in 2024, in response to pressure from commodity-market weakness in several sectors.

Chief Executive Duncan Wanblad said Thursday that the London-based company is on track to meet the target, while systematically reviewing assets, and will take "further actions as needed to ensure their competitiveness."

"We are focused on reducing complexities and continue to manage our assets, capital and portfolio dynamically and for value," he said.

Largely driven by softer commodity markets, the miner's shares tumbled 39% through last year, led further down by the poorly-received December update, which included a significant cut to production targets. Since April 2022, when CEO Wanblad took the reins, the miner has seen its market cap fall by $43 billion to $29.51 billion currently. On Thursday at 0813 GMT, shares were up 4.3% at 1,784.40 pence.

Earlier this week, its Johannesburg-based subsidiary Anglo American Platinum, the prior year's largest profit driver, announced cost savings and restructuring that could include around 3,700 job cuts. The platinum group metals sector suffered a price rout last year, especially hitting South African companies.

Underlying Ebitda from this sector dropped 73% to $1.21 billion.

Anglo American faced headwinds in other markets, too, as underlying Ebitda from nickel dropped to $133 million from $381 million and diamonds to $72 million from $1.42 billion.

Slumping prices for nickel--once running hot on the projected demand from electric vehicles--due to a flood of new supply from Indonesia squeezed the market, while diamond prices suffered under the rise of lab-grown diamonds, now constituting a fifth of diamond sales by value.

On the back of lower earnings and falling prices, Anglo American trimmed its final dividend to 41 U.S. cents a share from 74 cents, bringing the full-year payout to 96 cents, down from $1.98.

Looking ahead, Wanblad said that while the immediate macro picture presents some challenges for Anglo American's platinum group metals and diamonds businesses, "the demand trends for metals and minerals have rarely looked better."

In a separate release, the global miner announced it has partnered with Brazilian mining giant Vale on its Minas-Rio iron-ore project in the South American country.

Under the deal, Vale will contribute the its iron-ore resource Serpentina and $157.5 million in exchange for a 15% shareholding in the enlarged Minas-Rio, with an option to buy an additional 15% stake. The deal is expected to complete in the fourth quarter.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

02-22-24 0347ET