Anglo American’s first quarter production figures, which reflected its restructuring and were in line with previous guidance, did not sit well with investors, and the share price dropped almost 4% in morning and early afternoon trade.
Chief executive Mark Cutifani said operating results reflect the restructure and ongoing efficiency and cost reduction. Operational productivity continues on an upward trajectory, he said, and production guidance for 2016 remains unchanged.
Diamond production decreased by 10% to 6.9 million carats, reflecting declines at Debswana, DBCM and Namdeb as well as a 68% decrease in Canada due to Snap Lake being placed on care and maintenance in December.
Consolidated rough diamond sales of 7.6 million carats in Sights 1 and 2 of 2016 reflected an improvement in trading conditions relative to the second half 2015, but sales volumes were 10% lower than the first quarter of 2015 due to the number of sights in the respective periods.
Full year production guidance remains unchanged at 26 – 28 million carats.
Increased production at Amandelbult (up 33%) and Mogalakwena (7%) and Unki (14%), offset by lower production at Rustenburg saw platinum production increase 4% to 567,000oz, while refined platinum production dropped by 52% due to a planned stocktake and a 12 day safety stoppage at the Precious Metals Refinery.
Platinum sales volumes decreased by 21%, reflecting the stoppage, partly mitigated by inventory draw-downs.
Full year production (produced and refined) guidance of 2.3 – 2.4 million ounces remains unchanged.
Copper production from the retained operations (excluding the disposed of AA Norte) was in line with with last year, but down 19% compared to the previous quarter due to lower grades.
These were also responsible for a 10% decline in production from Los Bronces to 85,200 tonnes. At Collahuasi, production increased by 11% to 51,100 tonnes due to improved plant stability. El Soldado production increased by 67% to 10,200 tonnes due to the increasing availability of higher grade ore.
Total copper sales were in line with last year at 137,500 tonnes, and full year production guidance remains at 600,000 – 630,000 tonnes.
Nickel production increased by 67% to 11,200 tonnes following the successful completion of the Barro Alto furnace rebuild and production guidance remains unchanged at 45,000 – 47,000 tonnes.
Kumba’s iron ore production dropped 27% year-on-year to 8.9 million tonnes as Sishen (production down 34%) changes to a lower cost pit configuration. Total export sales volumes decreased by 18% year-on-year and by 11% from the previous quarter at 9.4 Mt.
Kolomela production dropped 9% to 2.7 million tonnes, due to safety stoppages. At The closure of Thabazimbi is on track.
Export sales decreased by 18% to 9.4 million tonnes due to lower production and total finished product stocks were 3.2 million tonnes (4.7 million tonnes at year end ).
Iron ore production at Minas-Rio increased 3% to 3.3 million tonnes.
In Australia, export metallurgical coal production dropped 9% to 4.5 million tonnes while export thermal coal production dropped 26% to 1.1 million tonnes.
In South Africa, export thermal coal production dropped 8% to 4.0 million tonnes. Eskom production decreased by 8% to 6.4 million tonnes.
In Colombia, production decreased by 12% to 2.6 million tonnes.
Full year guidance is unchanged at 21 – 22 million tonnes for export metallurgical coal and 28 – 30 million tonnes for export thermal coal from South Africa and Colombia.
Investec said the results reflect action in Anglo’s portfolio to adjust for tougher market conditions. While the update provided no surprises, it provided no commentary on strategic goals.
