Anglo American posts FY loss on commodity price-driven impairments

Anglo American has narrowed its first-half pre-tax loss to $364m, from $1.92bn, as mining titan booked a commodity price-driven impairment of $1.2bn linked to its Moranbah and Grosvenor coal assets.

Group revenue totalled $10.62bn, from $13.35bn. There was no interim dividend.

Chief executive Mark Cutifani commented that the company's actions to strengthen its balance sheet had put it well on track to achieve its net-debt target of less than $10bn at end-2016.

Net debt had fallen to $11.7bn at 30 June, from $12.9bn at end-December 2015.

Achievement of the net-debt target would be linked to stringent capital and cost discipline, improved operational performance, and assumed completion of announced non-core asset divestments.

"We are transforming Anglo American to be a more resilient business, with a core portfolio of world class assets in products where we are developing a sustainable competitive advantage - in De Beers, PGMs and copper," said Cutifani in a statement.

"Sharply lower prices across our products were mitigated by our self-help actions on costs, volumes, working capital and capital expenditure, together contributing to the $1.1 billion of attributable free cash flow generated in the first half of 2016," he added.

Anglo American said across its business, copper-equivalent unit costs had fallen 19% in US dollar terms, representing a 36% total reduction since 2012.

"We have agreed $1.5 billion of non-core disposals in H1 2016, including the Niobium and Phosphates businesses in Brazil," said Cutifani.

"We will continue to divest non-core assets using strict value thresholds as we continue to reduce our debt levels and position the core business on a foundation to deliver sustainably positive cash flows."