Global miner Anglo American took a $3.9bn (£2.5bn) writedown after commodity prices tumbled and it warned yesterday of more headwinds, but a steady dividend reassured investors.
The rout on commodity markets that has seen iron ore prices slide by half over the past 12 months has also forced Anglo and other mining groups to slash capital spending and cut costs. “It’s going to be a tough one or two years,” chief executive Mark Cutifani said.
The company, which flagged a likely writedown last month, posted a 25 per cent drop in underlying operating profit for last year to $4.9bn, in line with expectations, while earnings per share fell 17 per cent to $1.73.
The company, however, left unchanged its dividend at 85 cents a share after cutting $500m in overhead costs.
Cutifani has embarked on a restructuring programme to reduce costs, improve mining operations and sell underperforming assets.
“Anglo will have done enough to allay immediate market concerns around the dividend and cash flow, although peak net debt guidance for 2015 looks to be a bit higher than we were expecting,” analyst Matthew Kates at Nomura said.
Anglo said net debt was due to rise from $12.9bn at the end of last year to $13.5-$14bn during 2015. It warned last month of a likely charge on last year’s results and analysts had pencilled in about $2-3bn.