Anglo American more than triples annual payout with $6.2bn in dividends

Global mining company Anglo American (AAL.L) posted record full year earnings of $20.6bn (£15.3bn) and more than tripled its annual payout to shareholders, as soaring commodity prices boosted profits.

The mining giant’s earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 111% to $20.6bn, from $9.8bn in 2020, with profits attributable to shareholders rising to $8.6bn.

Anglo American has set aside $2.1bn as final dividend, equal to $1.18 per share, after already paying out $4.1bn, including $1bn special dividend and $1bn buyback.

Read more: Rio Tinto to pay $7.7bn final dividend after bumper profits

Including dividends and buybacks announced alongside half-year results in July, Anglo will return more than $6.2bn to investors for the 2021 financial year, a record for the 104-year-old company.

“These are clearly the strongest results we have ever posted,” outgoing CEO Mark Cutifani said.

Cutifani will step down in April after nearly a decade at the helm and hand over to Duncan Wanblad, currently the company's director of strategy and business development.

Supply restraints have sent commodity prices to record highs over the past year, which have boosted profits across the sector.

“Prices have been very much driven by supply struggling to keep up with that demand. And I think that will probably be with us for another year or two,” Cutifani said.

Copper production was unchanged at 647,200 tonnes from 647,400 tonnes in 2020, while iron ore production increased by 3.4% to 63.8 million tonnes from 61.7 million tonnes, as easing COVID restrictions provided a better output from Kumba Iron Ore.

Anglo American shares are up 3%.Chart: Yahoo Finance UK

The company cut its 2022 copper production guidance to 660,000-750,000 metric tons from the previous range of 680,000-760,000 tons. Anglo American said this was driven by reduced workforce availability in Peru due to the spread of the Omicron variant, which hampered progress at its Quellaveco project.

The firm also said it was planning to ramp up investment in its Woodsmith project, near Whitby in Yorkshire.

“In a year of two distinct halves, we recorded strong demand and prices for many products as economies recouped lost ground, spurred by government stimulus,” Cutifani said.

Read more: Glencore to return $4bn to shareholders after record earnings

“Copper and PGMs [platinum group metals] – essential to the global decarbonisation imperative – and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record financial performance.”

Net debt had dropped to $3.8bn by the end of 2021 from $5.5bn a year earlier while capital expenditure rose 48% to $565m as spending on projects deferred in 2020 because of the coronavirus pandemic picked up again.

Since 2017, Anglo has returned $12.2bn to shareholders and invested $18bn in the business.

Mining companies have been delivering record profits and cash returns. This week Rio Tinto (RIO) declared $16.8bn in dividends, the second biggest in UK corporate history. Glencore (GLEN.L) and BHP (BHP) also recorded strong results and handed bumper payouts to investors.

Watch: How does inflation affect interest rates?

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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