Anglo American's bottom line hit by cost headwinds, lower production volumes

Anglo American posted a big decline in full-year sales with profits and free cash flows faring even worse.

The outfit attributed that outcome to inflationary headwinds, including dearer energy, combined with lower production volumes and prices for many of its products.

"We continued to feel the effects of dislocations in the global economy on our business in 2022 - in energy, and across supply chains and labour markets," chief executive officer, Duncan Wanblad said.

"Extreme weather has disrupted the lives of so many, with exceptional rainfall also setting back several of our operations, while the energy crisis caused policymakers to react to mitigate sharply higher inflation."

Sales over the 12 months ending on 31 December declined by 15% to reach $35.12bn, resulting in a 30% drop in underlying earnings before interest, taxes, depreciation and amortisation to $14.5bn.

The mining group's Precious Group Metals operations recorded a 38% drop in underlying EBITDA to $4.42bn, while operating profits from copper and iron were roughly halved.

Offsetting those falls was a roughly 28% improvement at De Beers to reach $1.42bn and a near tripling in EBITDA from Steelmaking coal to $2.75bn.

Attributable free cash flow fared even worse, plummeting by 80% to $1.59bn.

Wanblad however highlighted the 30% return achieved on capital employed.

Net debt rose to $6.9bn, which was nevertheless less than 0.5% the company's underlying EBITDA.

Yet profits attributable to the company's shareholders also nearly halved to $4.51bn.

In underlying terms, basic earnings per share reduced by 31% to $4.97.

The final dividend per share was cut by 37% to 74 US cents, but was in line with Anglo's 40% payout policy.