Anglo plans US$1bil buy-back after bumper profit


Anglo is the first to report earnings among the handful of giant miners that produce iron ore and investors have been preparing for big windfalls.

LONDON: Anglo American Plc plans to buy back up to US$1bil of shares after the diversified miner reaped bumper profits from its iron ore business, more than offsetting declines in diamond and copper.

Anglo is the first to report earnings among the handful of giant miners that produce iron ore and investors have been preparing for big windfalls. The steelmaking ingredient surged to the highest in more than five years after a deadly Brazilian dam collapse and operational setbacks in Australian caused a supply shock.

The buy-back represents a shift for Anglo, which has been focused on repairing its bruised balance sheet and investing in growth while the world’s biggest producers handed massive amounts of money back to shareholders in recent years. The company’s net debt stands at US$3.4bil.

Cutifani said that after paying more than US$3bil in dividends since restarting the payments in 2017, and investing in growth, the buyback was a way of rewarding shareholders who wanted a different kind of return.

“For us it’s not about a short-term sugar rush,” Cutifani said. “It’s about getting the balance right and creating the world’s best mining business over the short, medium and long term.”

Anglo shares rose as much as 2.1% in early trading and were 1.7% higher at 8:05 am in London.For Anglo, the iron ore rally has meant surging profit from a commodity that’s traditionally been a weak spot.

After missing out on huge mines in Australia 20 years ago, the company has been scrambling to catch up, including by building the financially disastrous Minas Rio mine in Brazil.

Still, the outlook for iron ore may not be quite as rosy, with analysts including Liberum Capital Markets suggesting prices may have peaked. Fears of a global shortage are easing after Vale SA got permission to restart some operations in Brazil and as port stockpiles in China rise.— Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Anglo American , buy back , mumper profit , Cutifani ,

   

Next In Business News

RHB group exits asset management business in Indonesia
DNeX completes Silterra acquisition
Serba Dinamik nominates Nexia as new external auditor
Strong demand for handformers lifts ES Ceramics' revenue and profit
KLCI falls 10.91 points as regional markets slip
The path to net zero should be an integrated initiative
RAM: No credit concerns due to Edra Energy's delay in completing power plant
Gross fixed capital formation shrank 14.5% to RM281.1b
China shares tumble on regulatory clampdown; education firms selloff heavily
Oil falls US$1/bbl as coronavirus, floods threaten demand

Stories You'll Enjoy


Vouchers