ANGLOGOLD Ashanti would post interim headline share earnings of between 27 to 31 cents, an improvement on the previous year’s interim share earnings of 24 cents – a lift largely informed by the absence of 2018 exceptional items, which were many.
Excluding assets it sold between 2018 and the current year, interim production was largely flat at some 1.56 million ounces (H1 2018: 1.58 million oz).
These were the key points of the firm’s trading statement today which presented the flattest of bats to what will be the most interesting talking points when it reports its actual numbers on August 8: namely progress it has made in reshaping the portfolio.
The company is in the throes of a major transition under the stewardship of CEO, Kelvin Dushnisky, quickly approaching its first work anniversary. It said in May that it wanted to sell its remaining South African assets: Mponeng and Mine Waste Solutions (MWS).
Commenting today on the process – which also includes the earlier announced planned divestments of Cerro Vanguardia in Argentina and Mali’s Sadiola – AngloGold Ashanti said “the sales process was ongoing”. They’ll be questions about that.
Another point of focus will be the progress in the re-engineering of Obuasi in Ghana and the prospects for development assets in Colombia.
Commenting on the period under review, AngloGold said there had been production decreases from Sunrise Dam in Australia owing to lower trades and at Siguiri. This, and a planned decrease in Cerro Vanguardia production, would be offset by strong production improvements at Kibali, its joint venture in the Democratic Republic of Congo as well as at Geita, Iduapriem and Tropicana.
During the first six months of the 2018 financial year, AngloGold absorbed retrenchment costs which were not present in the six months under review equal to a $22m boost or five cents per share. There was also income of $11m, or three cents a share, from a legal settlement in Brazil in the six months under review, whilst income from joint ventures – mainly Kibali, provided a $38m, or nine cents per share lift in the six months.
There were some offsets to these items: a $25m or six cents per share decrease in net by-product revenue from a fall in silver sales received, mainly from Cerro Vanguardia. There was also an increase of some $27m – or seven cents per share – related to environmental rehabilitation costs.
Finally, a non-cash impairment of the uranium plant at MWS affected basic earnings negatively by $66m or 16 cents.
