Anglo American posts record FY profit amid strong demand, prices

In the year to the end of December, group underlying earnings before interest, tax, depreciation and amortisation rose to a record $20.6bn from $9.8bn, with revenue up 63% to $41.6bn.

Chief executive officer Mark Cutifani said: "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."

He said that copper and 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.

The miner proposal a final dividend of $2.1bn, equal to $1.18 per share - consistent with its 40% payout policy - and a $0.50 per share special dividend.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: "Anglo’s results are yet another reminder of how hot the mining industry’s been over the last year, and demonstrates the cash generation and shareholder returns that a miner can deliver when commodity prices are plump.

"Anglo’s differentiator is its lack of reliance on a single commodity like some of its peers. Iron ore is an important part of the business but platinum group metals (PGMs), copper and diamonds through De Beers are also a big chunk of the pie. That’s an attractive proposition as it makes the group less reliant on any single commodity price and it means the group’s already well set up to capitalise on de-carbonisation efforts across the globe, with copper and PGMs essential for the transition.

"Record profits meant shareholder returns were at the front of management’s minds, and the recent dividend and special dividend take the year’s total shareholder returns up to $6.2 billion. We’re expecting performance to drop somewhat in 2022 as commodity prices broadly have come down from the highs seen midway through last year, and inflation across the sector will weigh on margins. Nonetheless, miners are in a good spot right now and Algo looks well set up to capitalise on evolving demand."