Balance sheet resilience through capital and operational discipline and disposals, offsetting further price weakness
- Group underlying EBIT(1) of $2.2 billion, a 55% decrease, due to sharply weaker commodity prices ($4.2 billion(2) underlying EBIT impact), partially offset by weaker producer country currencies ($1.8 billion underlying EBIT benefit) and incremental cost reductions
- Cost reductions mitigating headwinds, with disposals being progressed:
- $1.3 billion of cost and productivity improvements delivered in 2015(3)
- Production volumes increased by 5% (Cu eq.)(4)
- Unit costs decreased by 16% in US dollar terms (Cu eq.)(4)
- $2.1 billion(5) of completed or announced disposals by end of 2015
- Capital discipline, improved operational performance and disposal proceeds delivered $600 million net debt reduction since the half year, to $12.9 billion as at 31 December 2015 (31 December 2014: $12.9 billion), despite a 14% further decrease in commodity price basket, with $14.8 billion of liquidity maintained
- Commodity price-driven impairments of $3.8 billion since the half year (pre-tax and includes related charges), contributing to a statutory loss before tax for the year of $5.5 billion
Financial highlights
US$ million, unless otherwise stated |
Year ended
31 December 2015 |
Year ended
31 December 2014 |
Change |
| Underlying EBIT(1) |
2,223 |
4,933 |
(55)% |
| Underlying earnings(6) |
827 |
2,217 |
(63)% |
| Group revenue(7) |
23,003 |
30,988 |
(26)% |
| Underlying EBITDA(8) |
4,854 |
7,832 |
(38)% |
| Loss before tax(9) |
(5,454) |
(259) |
- |
| Loss for the financial period attributable to equity shareholders of the Company(9) |
(5,624) |
(2,513) |
- |
| Underlying earnings per share (US$)(6) |
0.64 |
1.73 |
|
| Dividend per share (US$) |
$0.32 |
$0.85 |
- |
| Attributable ROCE%(10) |
5% |
9% |
- |
Notes to the highlights and table are shown at the bottom of this section.
Mark Cutifani, Chief Executive of Anglo American, said: “The global economic environment and its impact on prices have presented the industry with significant challenges during 2015. Against the strong headwinds of a 24% decrease in the basket price of our products for the year as a whole, our ongoing intense focus on operational costs and productivity delivered a $1.3 billion EBIT benefit in the year, providing some mitigation. Overall, our copper equivalent unit costs reduced by a further 16% in US dollar terms, representing a 27% total reduction since 2012.
“Our portfolio transformation is well on track, from c.65 assets in 2013 to 45 today. We completed or announced $2.1 billion(5) of disposals in 2015, including from the sale of our 50% interest in Lafarge Tarmac and the Norte copper assets in Chile, while also agreeing the sale of the Rustenburg platinum operations and two non-core coal assets in Australia, which we expect to complete during 2016.
“Together with operational and cost improvements, significant capex reductions and making the tough decisions with some of our more marginal assets, we have been able to maintain our net debt and liquidity levels at $12.9 billion and $14.8 billion respectively, despite our $4.0 billion(11) of capital commitments for 2015 and the $2.4 billion net EBIT erosion from lower prices and weaker producer country exchange rates.
“We have made significant progress, albeit in an environment that has been deteriorating at a faster pace. Today we are announcing(12) detailed and wide-ranging measures to sustainably improve cash flows and materially reduce net debt, while focusing on our most competitive assets to create the new Anglo American, positioned to deliver robust profitability and cash flows through the cycle.”
Notes:
(1) Underlying EBIT is operating profit presented before special items and remeasurements, and includes the Group’s attributable share of associates’ and joint ventures’ underlying EBIT. See notes 4 and 6 to the Condensed financial statements for underlying EBIT. For definition of special items and remeasurements, see note 7 to the Condensed financial statements.
(2) Excludes De Beers.
(3) Excludes $0.8 billion volume downside at De Beers in response to market conditions.
(4) Copper equivalent production has been adjusted for the disposal of Anglo American Norte in 2015. Copper equivalent unit cost shown on a reported basis. Adjusted for the Platinum strike, copper equivalent unit cost was (13)%.
(5) Gross proceeds from transactions completed or announced in 2015, principally Tarmac UK ($1.6 billion), Anglo American Norte ($0.3 billion) and the fair value of the Rustenburg consideration ($0.2 billion).
(6) See note 6 and 10 to the Condensed financial statements for basis of calculation of underlying earnings.
(7) Includes the Group’s attributable share of associates’ and joint ventures’ revenue of $2,548 million (2014: $3,915 million). See note 4 to the Condensed financial statements.
(8) Underlying EBITDA is underlying EBIT before depreciation and amortisation in subsidiaries and joint operations, and includes the Group’s attributable share of associates’ and joint ventures’ underlying EBITDA.
(9) Stated after special items and remeasurements. See note 7 to the Condensed financial statements.
(10) Attributable ROCE is defined as the return on the capital employed attributable to the equity shareholders of Anglo American plc. It is calculated based on achieved prices and foreign exchange.
(11) Excluding capitalised losses of $147 million.
(12) In the separate Strategy Press Release, published on 16 February 2016.
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