Anglo American H1 Profits up 125 percent to $1.7 billion

Anglo American, the worlds second biggest diversified miner and major De Beers shareholder, reports record interim results for 2004. First half earnings, profit, pre tax cash, and dividend were all up, largely helped by record base metals performance.

Anglo enjoyed record first half headline earnings of $1.3 billion, an increase of 52 percent over the corresponding period in 2003 with total profit for the period up 125 percent to $1.7 billion and cash generation (EBITDA) up 40 percent at $3.4 billion.

The company’s interim dividend increased from 15 cents to 19 cents.

However income from diamonds, what you used to be Anglo’s pride and joy suffered, as operating profit from De Beers was $350 million, down from $378 million in 2003.

De Beers' diamond stocks were reduced by nearly $400 million and operating cash flow generated was $870 million. This enabled De Beers to further reduce net interest-bearing debt from $1.76 billion at the end of 2003 to $1.17 billion at 30 June 2004 and to reduce net gearing from 29 percent to 21 percent.

 “Base Metals and Ferrous Metals reported record results due to higher metals prices and production volumes and also the impact of recent acquisitions, in particular Minera Sur Andes and Kumba,” says this morning Chief Executive Tony Trahar.

"Higher profits were also recorded by Coal and Platinum. The demand for rough diamonds remained firm. Our South African operations continued to operate in a challenging environment as the South African rand strengthened further against the US dollar, rising 17 percent over the prior period – this impacted our gold and platinum operations in particular.”

The sour note is Anglo American’s South African operations, which were adversely affected by the rand/dollar exchange rate which averaged R6.67, a 17 percent strengthening over the prior period.

While the Group’s mining businesses in general turned in strong performances, the company says its Industrial Minerals and Paper and Packaging businesses endured tougher market conditions as competitive UK aggregates markets and weak European pricing for uncoated woodfree paper products affected performance. Demand for rough diamonds remained firm.