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Anglo American releases preliminary 2020 results

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Global Mining Review,

Anglo American has released its preliminary 2020 results.

Financial highlights

Year ended 31 December 2020

  • Generated underlying EBITDA of US$9.8 billion (2019: US$10 billion).
  • Profit attributable to equity shareholders of US$2.1 billion (2019: $3.5 billion)
  • Net debt of US$5.6 billion (0.6x underlying EBITDA), reflecting investment in growth, largely offset by H2 cash flow.
  • Final dividend of US$0.72 per share, consistent with the 40% payout policy.
  • Investing in high quality growth, including Quellaveco (copper) and Woodsmith (low carbon fertilizer).
  • Good progress towards exiting remaining thermal coal operations in South Africa.
  • Committed to 30% net greenhouse gas (GHG) reduction by 2030 and carbon neutrality across operations by 2040.

Mark Cutifani, Chief Executive of Anglo American, said: “In 2020 we saw much of the world tested to its limits by COVID-19. I am immensely proud of how our team of more than 95 000 people across Anglo American pulled together to do what’s right for each other, for our many stakeholders across society and the business. We showed considerable speed and agility to help keep people and communities safe while supporting business continuity.

“Making sure every employee returns home safely at the end of each day drives our thinking and behaviours and it is with this mindset that we achieved our best ever safety performance. However, it remains our most pressing challenge that we still experience serious and fatal safety incidents. In 2020, and after 8 fatality-free months at our managed operations, two people lost their lives at work, one in each of our PGMs and thermal coal businesses. While we have made such progress, we can never say we have had a good year unless we have zero fatal incidents.

“The resilience of our diversified business, following the operational disruptions of the first half and benefiting from strong metals prices in the latter months, generated underlying EBITDA of US$9.8 billion, with an increased mining EBITDA margin of 43%. We are delivering strong cash returns, investing in value-adding growth and maintaining our strong balance sheet, resulting in a 17% ROCE and an attractive Total Shareholder Return of 16.2% for the year.

“Our balanced investment programme is driving material business improvement, while also delivering margin-enhancing and sector leading volume growth of 20-25% over the next 3 to 5 years, that includes first copper production from Quellaveco in 2022. Together with our P101 and technology work, we are on track to deliver our targeted US$3 – US$4 billion annual run-rate of incremental improvement by the end of 2022, also taking us towards our longer term target of a 45 – 50% mining EBITDA margin.

“Looking further out, we benefit from a sequence of high returning growth options, mainly in copper, PGMs, and now also crop nutrients. Our business is increasingly positioned to supply those products that are fundamental to enabling a low carbon economy and catering to global consumer demand trends. Combined with our integrated approach to technology and sustainability – also helping us reach carbon neutrality across our operations by 2040 – we are well positioned to meet the expectations of our full breadth of stakeholders.”

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