Miner Anglo American joins rivals with record profit and payouts

By Clara Denina and Zandi Shabalala

LONDON (Reuters) - Global mining company Anglo American (LON:AAL) posted record full-year earnings on Thursday helped by surging commodity prices and boosted its shareholder payouts for the year to a new high of $6.2 billion.

Anglo's results are the last of an earnings season in which rival miners Rio Tinto (LON:RIO), BHP Group and Antofagasta (LON:ANTO) also returned record payouts to shareholders as bumper commodity prices buoyed profits.

"These are clearly the strongest results we have ever posted," outgoing Chief Executive Mark Cutifani told reporters.

Cutifani will step down in April after nearly a decade at the helm and hand over to Duncan Wanblad, currently the company's director of strategy and business development.

"Copper and PGMs (platinum group metals) - essential to the global decarbonisation imperative – and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record financial performance," Cutifani said.

Anglo declared a final dividend of $2.1 billion, and a special dividend of 0.5 cents per share. The total $6.2 billion in payouts includes a $1 billion share buyback announced in August.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped to $20.6 billion in 2021, up from $9.8 billion the previous year and roughly in line with an average forecast of $20.5 billion from 14 analysts compiled by Vuma.

Shares in the miner, which hit a record high on Tuesday, were mostly muted in London.

Net debt had dropped to $3.8 billion by the end of 2021 from $5.5 billion a year earlier while capital expenditure rose 48% to $565 million as spending on projects deferred in 2020 because of the coronavirus pandemic picked up again.

Higher inflation has been a thorn in the side of Anglo and its rivals as it has been pushing up costs and the company said it reduced underlying EBITDA by $500 million.

Cutifani said the inflationary hit was likely to continue for the rest of the year.

The miner said it expects its $5 billion Peruvian copper project Quellaveco to come on stream in mid-2022, and said it expected production this year of 100,000 to 150,000 tonnes, down from a previous forecast of 120,000 to 160,000 tonnes.

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With an estimated yearly output of 300,000 tonnes, the project is one of the few sizable ones in the pipeline in an industry hunting for more of the metal, used in solar panels and electric vehicles, as the world moves to a lower carbon economy.

"We continue to see Anglo American in a healthy and attractive position. Higher commodity prices having driven meaningful free cash flow insulation allows for it to continue to pursue sector-leading growth," RBC Capital Markets analysts said in a note.