By Clara Denina and Nqobile Dludla
LONDON (Reuters) -Global miner Anglo American on Thursday reported a $1.9 billion loss in the first half, reduced its dividend, and said restructuring efforts continued, including divestment of its coal and ailing diamond units.
The London-listed miner has been selling or spinning off non-core assets to focus on copper and iron ore since bigger rival BHP’s failed attempt to take it over last year.
Anglo demerged its platinum business in May and on Thursday said its nickel and steelmaking coal assets were discontinued operations, with their sale agreed but not yet completed.
The company declared an interim dividend of $0.07 per share, down from $0.42 a year earlier, reflecting negative earnings at the platinum and coal divisions, and no contribution from diamond unit De Beers.
It posted a $1.9 billion loss for the first half, about triple its $672 million loss in the same period a year ago.
Core earnings or EBITDA of $3 billion for its copper, iron ore and De Beers businesses was above the $2.9 billion expected by analysts.
Anglo American, which expects copper to make up more than 60% of EBITDA post-restructuring, joined rival diversified miners Rio Tinto and BHP in reporting lower results, partly as global trade tensions have weighed on prices of most industrial metals this year.
CEO Duncan Wanblad said he expects “some material inflationary increases in the cost of goods over time,” adding that the direct impact of rising tariffs for Anglo was limited.
Anglo’s shares were down 4.6% in mid-morning trading.
DE BEERS
Wanblad said a formal process for the sale of De Beers, although complicated by a slump in global diamond prices, was advancing, with the second round of bids from interested buyers expected in the next month.
De Beers’s spin-off and eventual listing is the other option for Anglo American, which values it at $4.9 billion after recording $3.5 billion in impairments over the past two years.
“A trade sale would be the preferred option, but the trade sale has to happen to the right group of buyers… work is carrying on in parallel in terms of setting up the business for an IPO at the right time,” Wanblad said on Thursday.
Net debt stood at $10.8 billion, below analysts’ consensus estimate of $11.6 billion. Anglo expects this to come down once it starts to receive the proceeds from the nickel and coal asset sales and the 19.9% it still holds in the platinum business Valterra, formerly Amplats.
Wanblad did not give details about the timing of the sale of its remaining stake in Valterra, valued at $2.6 billion.
Despite a production halt caused by a fire at one of the mines included in the $3.78 billion sale to Peabody Energy in April, the miner still expects the transaction to be finalized.
Peabody in May issued a Material Adverse Change (MAC) notice to Anglo American, arguing the fire and closure of the mine were a significant negative development that potentially allowed the buyer to terminate the agreement.
“It’s really down to Peabody to decide what they intend to do with that now,” Wanblad said.
Analysts at Jefferies said that while an arbitration process would be a negative for both companies, a “revised negotiated deal that may include contingent deferred payments relating to a Moranbah restart is possible.”
(Reporting by Clara Denina and Nqobile Dludla; Editing by Jon Boyle and Bernadette Baum)
