Anglo American H1 Earnings up 22%

Anglo American announced a year-over-year underlying earnings increase of 22 percent at $3.1 billion, from last year’s $2.5 billion in the first half. Underlying earnings per share were up 28 percent to $2.18.

The record results were helped by base metals, with high operating profit due to increases in nickel, zinc and lead prices, and ferrous metals where higher iron ore prices and sales volumes led to a 12 percent increase in operating profit.  

Anglo Platinum's record operating profit reflected an increase of 62 percent compared with the same period in 2006, boosted by higher platinum group metals (PGM) prices, but partially offset by higher labor costs.

Operating profit at De Beers, in which Anglo American holds a 45 percent stake, was down 9 percent to $266 million from the first half of last year due to diminishing supplies of rough diamonds from Russian diamond producer Alrosa and price corrections in the gem diamond market in the second six months of 2006. De Beers recorded a 7 percent decline in sales to $3.4 billion.

However, De Beers and its partners saw production increase 2 percent to 25.3 million carats from last year’s 24.7 million carats.

Of this total, Debswana accounted for 16.4 million carats, marginally ahead of 2006; South African production rose by 3 percent to 7.6 million carats, principally due to increased output from Venetia; while Namdeb lifted production by 18 percent to 1.2 million carats, divided almost equally between its sea and land mining operations.

Anglo American expects that the 2007 demand for diamond jewelry as a whole will be 4 to 5 percent higher than in 2006. Taking into account this year’s rough price increases, aligned with steady demand, the company expects sales to improve over the first half of the year. However, the continuing shortages of certain categories of diamonds will likely constrain full-year sales.