Anglo American is scheduled to report results for 2023 on Thursday. Here is what you need to know.
REVENUE FORECAST: The diversified mining major is expected to post a full-year revenue of $30.83 billion, according to a consensus of 17 analysts’ forecasts compiled by FactSet. This would be a decline from the prior-year’s figure of $35.12 billion.
UNDERLYING EBITDA FORECAST: Underlying earnings before interest, taxes, depreciation and amortization are expected at $9.83 billion by consensus, compared with $14.495 billion a year prior.
NET PROFIT FORECAST: The London-based miner’s net profit is forecast to plummet to $2.44 billion from $4.51 billion.
Shares in Anglo American tumbled 39% through 2023, weighed by falling commodity prices, the rise of lab-grown diamonds and December’s cut to production targets.
WHAT TO WATCH
–Platinum group metals were the company’s biggest profit driver a year ago, but given the subsector’s persistent headwinds through 2023, this is likely to change. Iron ore and copper, which contributed 35% and 29%, respectively, of underlying Ebitda at half-year results are expected to have become key contributors.
–Anglo American’s net debt is expected by consensus to have widened to $10.75 billion from $6.92 billion a year prior. This partly explains growing calls for asset disposals, thus far resisted by the relatively new leadership, AJ Bell analysts said in a market comment. “Pressure for asset sales is building and the arrival of an activist investor or even a predator would not be the biggest shock in the world,” they wrote. The resistance to divest is likely due to the depressed prices that the FTSE 100-listed group would receive amid a period of weak commodity prices, they said.
–The global miner has a policy of paying out 40% of net profit in dividends to shareholders, but whether the company can maintain this ratio is a key question, HSBC analysts said in a research note. A year ago, it declared a final dividend of 74 U.S. cents a share, which took the full-year payout to $1.98. For 2023, analysts expect a full-year dividend of 93 cents, according to a FactSet-provided consensus.
–The company is likely to provide an update on cost-saving progress, UBS analysts said in a recent research note. Anglo American is targeting a $1 billion cut to costs by the end of 2024. Any guidance on restructuring will be a key item to look out for, HSBC analysts wrote in a note. On Monday, its subsidiary Anglo American Platinum announced a restructuring plan that would cut around 3,700 jobs.
–Due to the market weakness in diamonds and nickel, there is potential for Anglo American to book an impairment on assets in those markets, UBS analysts said. “We believe that [an impairment] is likely to draw headlines, particularly in the case of De Beers [its diamond subsidiary], which we continue to believe Anglo should divest,” Berenberg analysts wrote in a note.
Write to Christian Moess Laursen at christian.moess@wsj.com
