13th Feb 2015 07:31
LONDON (Alliance News) - Anglo American PLC Friday reported an expected drop in underlying earnings on the back of weaker commodity prices and reported a USD3.9 billion impairment charge, mainly related to its iron ore mine in Brazil, but the company retained its dividend.
For the year ended December 31, the miner reported underlying earnings before interest and tax of USD4.9 billion, a 25% reduction from GBP6.62 billion in 2013 due to weaker commodity prices which were partially offset by foreign exchange gains and increased production and sales.
"Our diversified product portfolio provided us with a degree of insulation from the particularly sharp price falls for the bulk commodities of iron ore and coal, albeit in an environment where weaker commodity prices accounted for USD2.4 billion of underlying EBIT reduction," said Anglo American Chief Executive Mark Cufitani.
Revenue for 2014 fell by 6% on the back of weaker commodity prices, partially offset by increased production and sales. Revenue totalled USD30.98 billion compared to USD33.06 billion in 2013.
Underlying earnings before interest, tax, depreciation and amortization for the year was USD7.83 billion, an 18% decrease from 2013 when Anglo American reported underlying EBITDA of USD9.52 billion.
Anglo American booked impairments totalling USD3.9 billion, of which USD3.5 billion was attributable to the company's Minas Rio iron ore mine in Brazil.
Anglo American retained its dividend at USD0.85 per share, flat from 2013.
"We are committed to maintaining a robust capital structure which balances long-term business value growth with sustainable capital returns to shareholders," said Cufitani.
The company said net debt stood at USD12.9 billion, an increase from 2013, and Anglo American said it expects net debt to reach a peak of between USD13.5 billion to USD14.0 billion in 2015.
"In the immediate term, I expect tough trading conditions to prevail during 2015, but we are determined to continue to build on our already very significant operational improvements, drive towards an effective and efficient organisation and culture, and to be unwavering in our capital discipline," Cufitani said in the company's statement.
Capital expenditure for the year slightly fell to USD6.0 billion in 2014, of which USD3.2 billion was committed to expansionary projects, whilst USD2.0 billion was spent on "sustaining our existing business," the company said.
By Joshua Warner; [email protected]; @JoshAlliance
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