AngloGold resumes dividend payments after three years
DIAMOND mining company De Beers has said it is optimistic about its growth prospects after it reported a 30 percent increase to $6.1 billion (R79.74bn) for the 2016 financial year, saying this was a result of a decisive decision taken across the business in 2015.
The company said yesterday its earnings before interest, taxes, depreciation and amortisation also shot up 42 percent to $1 406bn from $900 million during the corresponding period in 2015.
Fortunes lifted
De Beers said it benefited on the favourable exchange rates and its fortunes were lifted by cost-saving measures and portfolio changes it implemented.
“We put pretty decisive actions at De Beers which paid off last year,” said the group head of strategy and corporate affairs, Gareth Mostyn.
“We put our focus on our customers, helping them get what they really needed.”
The company said its unit costs decreased 19 percent from $83/carat to $67/carat during the period, while revenue increased driven by higher rough diamond sales, which increased by 37 percent to $5.6bn.
It said this was pushed by a 50 percent increase in consolidated sales volumes to 30 million carats from 19.9 million carats in 2015, and was partly offset by a 10 percent decrease in the average rough diamond price of $187/carat.
The company said production in South Africa, however, declined by 9 percent yearon-year to 4.2 million carats, due to the early completion of the sale of Kimberley Mines in January 2016, which was partly offset by an increase of 12 percent at the Venetia mine, owing to the processing of higher grades.
Global growth this year would be dependent on a number of macroeconomic factors.
It said despite some macro-economic challenges, it remained cautiously optimistic as the global consumer demand for diamonds was expected to increase this year after falling flat last year.
“Despite being the most mature market, the US continues to see the strongest consumer demand, and this is set to continue in 2017,” Mostyn said.
“Demand from Chinese consumers increased domestically, albeit offset by reduced international spend and the exchange rate impact.
“Longer-term, the sector is likely to continue to see benefit from a continuing rise in the world’s middle classes in emerging markets, particularly in China and India,” Mostyn added.
De Beers added that global growth this year would be dependent on a number of macro-economic factors, including the economic policy of the new administration in the US, the strength of the US dollar impacting consumer demand, the impact of the demonetisation policy in India and economic performance in China.
Mostyn said these could have a considerable impact on demand.
He said the company also invested in its mining assets in South Africa and Bostwana, while also launching the firm’s offshore business in Namibia during the first half of the year.
Mostyn added that the firm focused on its marketing ability, especially in America. negative ANGLOGOLD Ashanti yesterday said it was resuming dividend payments following a hiatus of more than three years after nearly doubling free cash flow to $278 million (R3.63 billion) in the year to the end of December.
The JSE-listed gold miner, which is also listed in New York, said free cash flow was nearly double the $141m achieved in 2015, after $30m in once-off costs to redeem a high yield $1.25bn bond.
The gold miner, which has 17 gold mines in nine countries, said adjusted headline earnings came in at $143m, compared with $49m in 2015 while revenue was recorded at $4.3bn – up from $4.2bn reported during the corresponding period the year before.
The company noted that it had also been boosted by a strong turnaround in production performance in the second half, a higher gold price (up 8 percent year-on-year) and weaker operating currencies in Argentina, Brazil and South Africa.
Cost discipline
All-in sustaining costs came in within revised guidance range at $986 (R12 890) per ounce, up from $910 the year before. The miner said this reflected “continued cost discipline and weaker local currencies in some jurisdictions, offset by an increase in sustaining capital expenditure and inflation”.
Production of 3.6Moz was within the original guidance, despite being negatively impacted by weaker output from the South African mines, due mainly to safety-related stoppages, lower grades from Kibali, a planned decrease in head grades at Tropicana and Geita, and no production contribution from Obuasi.
Both Mponeng and Moab Khotsong in South Africa delivered increased production over the prior year, along with Iduapriem and Siguiri in the continental Africa region and Sunrise Dam in Australia.
Mponeng delivered the best improvement, with a 16 percent increase in production and a 14 percent decrease in all-in sustaining costs year-onyear.
The dividend per share declared by AngloGold
The company’s chief executive officer, Srinivasan Venkatakrishnan, said: “Production from our operations delivered a strong turnaround in the second half of the year. We have again generated strong cash flows despite a volatile gold price, which has further strengthened our balance sheet and improved flexibility.”
A dividend of 130 cents share was declared. a