Anglo American resumes dividend as profits improve

30th July 2010, Comments 0 comments

Global miner Anglo American announced on Friday it was resuming its dividend payment to shareholders as underlying profits soared on the back of rising metal prices and Chinese-led demand.

Anglo American, which has significant mining operations in South Africa, said operating profit more than doubled to 4.4 billion dollars (3.4 billion euros) in the first half of 2010 compared with the first six months of 2009.

Revenues shot up more than a third to 15 billion dollars, the London-based company said in an earnings statement.

"Strong demand for steel raw materials, driven by Chinese-led consumption, resulted in favourable demand environments," Anglo American said in its statement.

"Earnings were further supported by a resurgence of demand and prices for base metals, most notably in the copper market, where Anglo American's portfolio of world class assets delivered substantial earnings."

The company said it would pay an interim dividend of 0.25 dollars -- an announcement that helped to lift its share price by 0.16 percent to 2,545 pence in London. The capital's benchmark FTSE 100 index was down 0.35 percent in morning trade.

"I am pleased to announce the resumption of dividend payments with an interim dividend of 25 cents per share, reflecting the group's improved operating performance and financial position, as well as progress on non-core asset sales and a supportive medium term outlook," chief executive Cynthia Carroll said.

"The short term outlook for the world economy has become more uncertain in recent months, with certain less favourable leading economic indicators. "However, in the medium to long term, we remain confident about prospects for Anglo American with the process of industrialisation and urbanisation in China, India, Brazil and other emerging countries continuing to drive demand for our key commodities," she added.

In 2009, Carroll suspended the group's dividend for the first time in more than 60 years and slashed more than 23,000 jobs -- including contractor posts -- as profits were hit by sliding metal prices amid the global economic slump.

Last year the group also fought off a hostile takeover attempt by Swiss miner Xstrata.

On Friday, Anglo American also announced that the group's net profits slumped 31 percent to two billion dollars in the first half, a result skewed by the fact it had made a major disposal the previous year.

During the first half of 2009, Anglo American had earned more than one billion dollars from the sale of its interest in gold producer AngloGold Ashanti.

In May, it agreed to sell its zinc assets to British rival Vedanta Resources for almost 1.34 billion dollars. Anglo American has a 45-percent stake in De Beers, the world's largest diamond company.

© 2010 AFP

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