Anglo American (AAL) H2 2024 earnings summary

Executive summary

• Achieved strong operational and cost performance in 2024, maintaining a 30% EBITDA margin despite a 12% revenue drop and a 10% decline in basket price, with full-year EBITDA of $8.5 billion.

• Portfolio simplification advanced with sales of steelmaking coal ($4.8B) and nickel ($500M), and the planned de-merger of the PGM business by mid-2025.

• Strategic focus on copper, iron ore, and crop nutrients, with significant progress in operational excellence, cost discipline, and growth initiatives.

• Safety performance improved, with a 28% reduction in injury rates since 2022 and continued integration of contractor management, though three fatalities occurred in 2024.

• Major divestments and demergers are expected to strengthen the balance sheet in 2025.

Financial highlights

• Revenue declined 12% year-over-year to $28.6bn, mainly due to a 10% reduction in basket price.

• EBITDA fell by $1.5B to $8.5B, with margins held steady at 30% due to $1B in cost savings.

• Net debt remained flat at $10.6B, with net debt to EBITDA at 1.3x, within the target range.

• Cash conversion reached 97%, driven by a $1.8B working capital inflow.

• Final dividend of $0.22/share, total 2024 dividend $0.64/share, in line with 40% payout policy.

Outlook and guidance

• 2025 and 2026 production guidance largely unchanged, with 2027 guidance added; 2025 copper: 690–750kt, iron ore: 57–61Mt, PGMs: 3.0–3.4Moz, diamonds: 20–23Mct.

• On track to deliver $1.8B in run-rate cost savings by end-2025, with $1.3B already achieved.

• CapEx for the simplified business to focus on copper and iron ore growth, with sustaining CapEx at ~$2B/year.

• Group effective tax rate expected at 40–43% for 2025; long-term rate for simplified portfolio at 38–42%.

• Further $0.8bn cost savings to be realized by end-2025.