Trebles all round

The festive season seems well and truly to have arrived over at Carlton House Terrace, with Mark Cutifani’s investor briefing stopping just short of putting on the red suit and white beard.

It’s clearly mince pies and trebles all round for investors who were brave enough to pile in at the bottom of the cycle back in January 2016, when the share price appeared to be tumbling towards the deck at a vertiginous rate and the only question was just how low could it go.

A five-year view paints a rather different picture, with the price now back to approximately where it was before it went into free fall. Yet Cutifani picks five years as the time frame in which he states they have completely transformed the quality of the asset portfolio and the company’s performance as a whole. This is now a highly competitive business, with margins among the best in the industry, and Cutifani is aiming to add $3bn-$4bn of incremental annual earnings before interest, tax, depreciation and amortisation by 2022.

The balance sheet is looking a lot healthier, with net debt reduced over the past three years by $9bn, and some $2bn of dividends having been paid to shareholders over the past 18 months. The company is expecting the next step change in its performance to be driven by the deployment of its Futuresmart Mining technologies and digitalisation, which will transform the way it mines, processes and markets its products.

This is a far cry from the wailing and gnashing of teeth that was heard three years ago, and it’s been a remarkably strong recovery.

This is now a highly competitive business, with margins among the best in the industry