Anglo American has reported a 29% drop in profit attributable to equity shareholders to $3.6bn for the first half of 2022, compared with $5.18bn in the same period last year, due to cost inflation and lower production.
The firm’s underlying EBITDA for the six months ended 30 June 2022 stood at $8.7bn versus $12.1bn in the same period a year ago.
The decrease was attributed to the firm’s higher input costs and unfavourable sales volumes.
Revenue dropped 17% to $18.1bn from $21.8bn over this period.
In a press statement, the mining firm said: “Net debt (including related derivatives) of $4.9bn has increased by $1bn since 31 December 2021, driven by working capital cash outflows of $1bn due to higher PGMs pricing impacting the valuation of purchase of concentrate (POC) inventory, and an increase in finished goods at Copper and De Beers.”
Performance was said to be hit by supply chain disruptions of key commodities, triggered by Russia’s invasion of Ukraine and subsequent sanctions by Western nations.
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The resultant surge in energy prices and the looming fear of recession have impacted demand.
The firm also said that associated pressures on its operating costs have been partially reduced by weakening commodity producer country currencies in Australia, Brazil, Chile and South Africa.
Anglo American CEO Duncan Wanblad said: “As we progressed through the first half, we began to regain operational momentum while also adjusting to the considerable challenges posed by Covid-19 related absenteeism, disrupted supply chains and logistics corridors, weather extremes and geopolitically-led economic volatility.”
The firm’s attributable free cash flow for H1 2022 reduced to $1.6bn from $5.64bn in the prior year due to strong prices in Q1 2022 that ‘declined towards the end of the period in tandem with increasing cost inflation’.
Furthermore, Anglo American’s board has proposed interim dividend of $1.24 a share, a drop from last year’s $1.71 payout.