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Anglo American Announces Significant Progress on Delivering Strategic Objectives


Anglo American on Friday announced its results for the six months ending June 30, 2010.

Group operating profit from core operations was $4.1 billion, while underlying earnings were $2.2 billion. Underlying earnings per share were $1.84.

Commenting on the financial results, Chief Executive Cynthia Carroll said “Anglo American has made further significant progress during the first six months of 2010, delivering on our strategic objectives. Our businesses are operating strongly under our new organizational structure, our cost and efficiency programs continue to deliver ahead of expectations, our divestment program is well under way and we continue to make further progress on our safety performance. We achieved a strong operating performance across our businesses against still uncertain global economic conditions.”

Other highlights of the announcement are:

• Asset optimization and procurement programs are ahead of expectations, with run rate of $1 billion from core businesses for the six month period
o Asset optimization: $796 million, including one-off benefits
o Procurement: $205 million
• Platinum operational turnaround to position in lower half of cost curve – cash operating costs controlled; full year production of 2.5 million ounces on track; labor productivity increased 11%
• $2.2 billion of expected proceeds from agreed divestments announced to date
o $1.3 billion sale of zinc business
o $0.5 billion sale of undeveloped Australian coal assets
o $0.4 billion sale of Tarmac’s European businesses
• Our near term growth projects at Barro Alto, Los Bronces and Kolomela are all on budget and on schedule.  At Minas Rio, good progress has been made, although key regulatory approvals remain outstanding.
• New safety practices embedded and delivering further improved results
o 38% reduction in fatalities vs. H1 2009
o 30% improvement in lost time injury rates vs. H1 2009
• The dividend has been reinstated with an interim dividend of $0.25 per share.

On the outlook for the industry, Cynthia said “The short term outlook for the world economy has become more uncertain in recent months, with certain less favorable leading economic indicators. However, in the medium to long term, we remain confident about prospects for Anglo American with the process of industrialization and urbanization in China, India, Brazil and other emerging countries continuing to drive demand for our key commodities.”

For the full report on 1H10 Interim Results: http://www.angloamerican.co.uk/aal/media/releases/2010pr/2010-07-30/2010-07-30.pdf

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