Mining giant Anglo American (LON:AAL) appears to have come out on top of the commodity crisis, decreasing debt and delivering a 25 percent rise in earnings over the past year.
Net debt was reduced to $8.5 billion, driven by $2.6 billion attributable free cash flow and asset disposals. The company’s position is now strong enough to scrap plans to sell further assets, CEO Mark Cutifani confirmed in a conference call after the release of the results.
“We got there. We delivered it. We do not need to sell assets to address the balance sheet issues. If any assets go from here, it will be on the basis of a portfolio adjustment”, he said.
Reported profit more than doubled over the last year as the tough commodities market began to recover. Group underlying EBITDA increased by 25 percent to $6.1 billion, despite a 3 percent decrease in average prices.
Net debt fell by 34 percent to $8.5 billion, well below Anglo American’s $10 billion target. The company have had one of the best approaches to the recent commodity crisis, leaping into action to downsize the business by selling mines and focusing on just three core commodities, platinum, copper and diamonds.
“Overall, it’s clear that as a result of our decisive actions in 2016, and the results delivered by our people across the company, Anglo American is now more robust, with a stronger balance sheet and more competitive cost structure around a world class diversified asset base”, Cutifani said in a statement.
“We have also taken further strides in transforming the portfolio but benefited from sticking to our overriding commitment that long term shareholder value must be safeguarded. Looking ahead, we must continue to build on this solid progress.”
Shares in Anglo American spiked after the release of the figures, but have since remained lacklustre. The company is currently trading down 1.03 percent at 1,346.82 (0932GMT).