Anglo American 2023 Financial Overview

2 Mins read

Revenue Forecast The diversified mining major is expected to post a full-year revenue of $30.83 billion, a decline from the prior-year’s figure of $35.12 billion as per a consensus of 17 analysts’ forecasts compiled by FactSet.

Underlying EBITDA Forecast Underlying earnings before interest, taxes, depreciation and amortization are anticipated to be $9.83 billion by consensus, compared with $14.495 billion in the previous year.

Net Profit Forecast Anglo American’s net profit is forecasted to drop to $2.44 billion from $4.51 billion.

Performance and Factors

Throughout 2023, shares in Anglo American fell by 39%, affected by falling commodity prices, the emergence of lab-grown diamonds, and the December cut to production targets.

Key Considerations

  • Platinum Group Metals Shift: While platinum group metals were the company’s primary profit driver previously, challenges in this subsector suggest a possible shift in the profit landscape.
  • Rising Stars: Iron ore and copper, which accounted for 35% and 29% of underlying EBITDA at the half-year mark, are poised to emerge as key contributors.

Stay tuned for Anglo American’s upcoming report to gain insights into its financial performance for 2023.

Anglo American’s Financial Outlook

Anglo American, a renowned global miner, is facing increasing pressure due to its rising net debt, which is expected to reach $10.75 billion compared to $6.92 billion the previous year. Analysts at AJ Bell point out the growing calls for asset disposals, a move that the company’s new leadership has been reluctant to make. The possibility of an activist investor or predator entering the scene is becoming more plausible as the resistance to divestment persists amidst weak commodity prices.

Dividend Dilemma

HSBC analysts highlight a key question surrounding Anglo American’s dividend policy, which traditionally pays out 40% of net profit to shareholders. Last year, the company distributed a final dividend of 74 U.S. cents per share, totaling $1.98 for the year. Looking ahead to 2023, analysts anticipate a full-year dividend of 93 cents based on a FactSet-provided consensus.

Focus on Cost Savings and Restructuring

UBS analysts emphasize that the company’s progress in cost-saving initiatives will be a focal point for investors. Anglo American has set a target to reduce costs by $1 billion by 2024. Any updates on restructuring efforts will also be closely monitored, following the announcement by subsidiary Anglo American Platinum of a plan to cut approximately 3,700 jobs in a recent restructuring move.

Market Weakness in Diamonds and Nickel Prompts Potential Impairment for Anglo American

Analysts at UBS Warn of Possible Impairment on Assets

Analysts at UBS have pointed out the market weakness in diamonds and nickel, highlighting the potential for Anglo American to book an impairment on assets in these sectors. The looming impairment is expected to garner attention, especially in the case of De Beers, Anglo’s diamond subsidiary.

Divestment of De Beers Recommended by Berenberg Analysts

In a note, Berenberg analysts further underlined their belief that Anglo should divest from De Beers. The suggestion adds an interesting twist to the situation, raising questions about the future direction of Anglo American in the face of these market challenges.

Related posts

Government Matching Contribution for Retirement Savings

2 Mins read
According to researchers, nearly 22 million Americans are set to benefit from a new government matching contribution initiative aimed at enhancing retirement…

Oil Market Update

1 Mins read
Oil Market Update On Tuesday, crude oil futures prices were lower, while refined product contracts were experiencing a second consecutive day of…

Carrier Global Sells Industrial Fire Business

1 Mins read
Carrier Global Sells Industrial Fire Business for $1.425 Billion Carrier Global has announced the sale of its industrial fire business to private-equity…

Leave a Reply

Your email address will not be published. Required fields are marked *