Anglo American first half net profit down 31 pct but underlying earnings improve

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jul 2010

Mining company Anglo American PLC said Friday it was resuming dividend payments as business improved in the first half of the year, although net profit slid by 31 percent from a year ago when the company posted a large one-time gain.

Anglo American said its net profit was $2.06 billion, down from $2.97 billion a year earlier when the company sold its interest in AngloGold Ashanti for $1.1 billion.
The company said pretax profit was up 8 percent to $3.9 billion, led by a strong demand for raw materials from steel makers.
Anglo, which last paid a dividend in the first half of 2008, announced an interim dividend of 25 cents per share.
Shares in the company were up 0.7 percent at 2,557.5 pence in early trading on the London Stock Exchange, but drifted 0.7 percent lower by late morning.
Alison Turner, analyst at Panmure Gordon & Co., said the operating profit of $4.4 billion, more than doubled from a year earlier, was significantly less than expected.
"The key focus areas from today's results are copper, thermal and metallurgical coal. Operating profit in the copper division was 15 percent below our forecast at $1.2 billion, thermal coal operating profit was 20 percent below our expectation at $351 million and metallurgical coal 22 percent below our forecast at $263 million," Turner said.
Anglo said its Minas Rio iron ore project has been delayed by "increasingly rigorous" environmental regulation in Brazil. The company said projected costs for the project have risen by $210 million, and it could be as long as 30 months before the first ore is shipped.
Jonathan Jackson, head of equities analysis at Killik & Co., said Anglo had reported "a reasonable set of results although the delay in the Minas Rio project was disappointing.
"The main driver for the share price in the short term is likely to remain the outlook for global economic growth," Jackson said in a research note. While positive about Anglo's long-term outlook, "in the short term we do not see any compelling reasons to buy the shares," he said.
Anglo American said it plans to dispose of $2.2 billion in assets this year including $1.39 billion worth of zinc assets being sold to Vedanta Resources PLC.
The company said operating profit from iron ore and manganese mining more than doubled to $1.6 billion and from copper it was up 96 percent to $1.2 billion as prices rose.

Source: Associated Press