Anglo American

  • Anglo American released a blockbuster set of results for the year to year   to December 2021 on the back of sustained demand for commodities such as   copper and Platinum group metals. These commodities are a significant feature   of global de-carbonisation efforts, and with bulk commodities such as iron   ore being essential for infrastructure developments.

  • On   the flipside, supply-side growth has been constrained by the lack of new   greenfield projects as well as a tight regulatory operating environment.   These factors have resulted in major delays for new projects being completed.

  • Robust   cash generation from operations resulted in a $20.6 bn inflow compared to $8   bn in 2020. Meanwhile, free cash flow grew from $1.2bn to $7.8bn. The return   on capital employed of 43% was way above the target of 15% through the cycle.

  • The company stated that they were committed to capital discipline, and to   maintaining a strong and flexible balance sheet. This is a major positive   factor when operating in a cyclical commodity business.

  • One of the most important and significant measurements of the financial strength   of Anglo American was the net debt of $3.8bn, which is a paltry 0.2x   underlying EBIDTA. The EBITDA margin of 56% is also a very impressive feature   of its financial prowess.

  • In addition to a proposed final dividend of $1.18, a special dividend of $0.50,   as well as the interim special dividend of $2.51, has resulted in a bonanza   dividend pay-out of $4.19, excluding the share buyback of $0.80.

  • A strong pipeline of new projects, such as the new copper venture in Chile   which will become operative in mid-2022, will be a positive for the further   diversification of the commodity portfolio of the Anglo American group, as   well as various brownfields expansion operations.

Anglo American