Anglo American (AAL) H1 2024 earnings summary

Executive summary

• Delivered resilient H1 2024 results with $5.0 billion EBITDA, strong cost performance, and stable operations despite a 10% decline in commodity prices and challenging market conditions; Copper and Iron Ore contributed $3.5 billion of EBITDA.

• Accelerated portfolio transformation, focusing on copper, premium iron ore, and crop nutrients, with divestments or demergers underway for steelmaking coal, nickel, PGMs, and De Beers.

• Maintained commitment to operational excellence, safety, and sustainability, with ongoing cost-saving initiatives and a disciplined approach to capital allocation.

• Safety performance improved, with a 23% reduction in injury rates since 2022, but two fatalities occurred at Amandelbult and two work-related fatalities in H1 2024.

• Net loss attributable to equity shareholders of $0.7 billion, impacted by a $1.6 billion impairment at the Woodsmith project due to a slowdown in development.

Financial highlights

• Revenue declined 8% year-over-year to $14.5 billion, mainly due to a 10% drop in basket prices, especially in iron ore and PGMs; Group basket price fell 10%.

• EBITDA margin improved to 33% (up 2pp/200bps year-over-year).

• Net debt increased to $11.1 billion, with net debt/EBITDA at 1.1x, within target range.

• Interim dividend of $0.42 per share recommended, maintaining a 40% payout policy.

• ROCE at 14%, down 4pp year-over-year.

Outlook and guidance

• Full-year CapEx guidance remains at $5.7 billion, with reductions to $4.9 billion in 2025 and $4.3 billion in 2026.

• On track to deliver ~$1.8 billion of sustainable cost savings by end 2024, with $1 billion opex savings and $0.8 billion from portfolio transformation.

• 2024 production guidance: copper 730–790kt, iron ore 58–62Mt, PGMs 3.3–3.7Moz, diamonds 23–26Mct, steelmaking coal 14–15.5Mt, nickel 36–38kt.

• Unit cost guidance for 2024: copper ~157c/lb, iron ore ~$37/t, PGMs ~$920/oz, diamonds ~$95/ct, steelmaking coal $130–140/t, nickel ~505c/lb.

• Dividend payout policy of 40% of underlying earnings maintained.