ANGLOGOLD Ashanti on Friday unveiled a $2bn share buy-back programme as it seeks to out-perform gold industry rivals in shareholder returns after registering another record free cash flow quarter.
Announcing its first quarter numbers the New York listed miner declared a base dividend of $63m, equal to 12.5 US cents per share. This was topped up to 50% of free cash flow for a total payout of $585m, or 116 US cents per share.
“The proposed share repurchase programme is intended to offer another vector for shareholder returns, and align the company’s capital return framework with its North American peers,” said Alberto Calderon, CEO of AngloGold.
Analysts warmed to the buyback. “We think the market will continue to react favourably to AngloGold’s proactive approach in allocation a significant portion of the current gold price windfall to shareholders – a key point of differentiation vs peers,” said analysts at Johannesburg-based RMB Morgan Stanley.
“We expect a positive market reaction, given the strong cash delivery,” said Arnold van Graran, an analyst for Nedbank Securities. AngloGold was outperforming peers on the JSE, said Tanya Jakusconek, an analyst at Scotiabank.
AngloGold reported net cash at quarter close of $868m which compares to net debt of $755m a year ago – another indication of how transformative the gold price has been for firms such as AngloGold.
