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01/09 23:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance, with significant revenue and EBITDA growth, alongside a positive free cash flow turnaround. Despite some operational and supply chain challenges, management's optimistic outlook and proactive strategies to manage costs amid inflation are reassuring. The interim dividend and strong liquidity further support a positive sentiment. However, lack of specific revenue guidance could temper enthusiasm slightly. Overall, the market is likely to react positively, anticipating continued growth driven by new product launches and improved market conditions.
Revenue $1.12 billion, up 65% year-on-year, driven by higher tons and grades mined, as well as improved cash flow from operations.
EBITDA $1.12 billion, up 65% year-on-year, reflecting strong operational performance and cost management.
Free Cash Flow $206 million, a turnaround from a $205 million outflow last year, due to improved ounces sold and lower operating costs.
Headline Earnings $313 million or $0.74 per share, compared to $61 million or $0.41 per share in the first half of last year, representing a more than 400% increase due to strong operational performance.
Cash Costs 1% lower year-on-year, achieved despite inflationary pressures, due to improved operational performance and cost efficiencies.
Total Capital Expenditure Increased by 11% year-on-year, in line with internal plans.
Average Gold Price Received $2,205 per ounce, up 14% year-on-year.
Adjusted EBITDA $1.12 billion, up 65% year-on-year, driven by higher ounces sold and lower operating costs.
Cash on Hand and Undrawn Facilities Approximately $2.3 billion, indicating strong liquidity.
Leverage Ratio 0.6 times, indicating a strong balance sheet even while investing in growth.
Working Capital Movement Positive $46 million year-on-year, with a $160 million change in working capital.
Production Production was up 2% year-on-year, with a strong Q2 performance driven by key assets.
Cash Flow from Kibali $90 million received in loan repayments and dividends.
Sustaining Capital Expenditure Expected to grow slightly as investments in reserves development increase.
Average Grade at Obuasi 7.9 grams per ton in June, compared to 5.6 grams per ton for the first half.
Free Cash Flow Before Growth Capital Expenditure $337 million, a near fivefold increase year-on-year.
Nevada Production Center: AngloGold Ashanti is investing in a new major production center in Nevada, expected to produce up to 500,000 ounces over a multi-year period at Tier-1 costs.
Quebradona Project: The company has a world-class copper-gold deposit in Quebradona, providing optionality and exposure to the energy transition.
Production Increase: Production was up 2% year-on-year, with a strong Q2 performance driven by key assets.
Cash Cost Reduction: Cash costs were 1% lower year-on-year, achieved despite challenges in Australia and Guinea.
Free Cash Flow: Free cash flow turned positive at $206 million, a significant improvement from a $205 million outflow last year.
Obuasi Production: Obuasi's Q2 production was steady at 54,000 ounces, with expectations to ramp up production significantly in the second half.
Full Asset Potential Program: The program continues to yield results across the portfolio, with significant improvements in productivity and cash cost reductions.
Dividend Declaration: An interim dividend of $0.22 per share was declared, reflecting confidence in ongoing performance.
Credit Rating Engagement: The company is actively engaging with credit rating agencies to communicate improving fundamentals.
Safety Risks: A tragic incident occurred in May where a contractor lost his life, highlighting the ongoing safety risks in operations.
Operational Challenges: Flooding in Australia affected production, causing interruptions in supply lines and impacting the ability to restock consumables.
Supply Chain Issues: Intermittent interruptions to supply lines into Tropicana hampered operations, indicating potential supply chain vulnerabilities.
Regulatory and Environmental Risks: Ongoing environmental management and closure provisions in Brazil pose regulatory challenges that could impact financial performance.
Economic Factors: Inflation remains elevated at around 6%, impacting operational costs despite a 1% reduction in cash costs year-on-year.
Hedging Losses: Realized hedging losses of $23 million during the first half due to zero-cost collars implemented to manage price risks.
Production Volatility: Obuasi's production is subject to volatility due to the maturity of Block 8 and challenges in accessing higher-grade blocks.
Market Conditions: The company faces competitive pressures and must remain vigilant in managing costs to maintain competitiveness in the gold market.
Full Potential Program: The company continues to drive full potential initiatives to enhance asset performance, resulting in lower costs and improved production.
Obuasi Production: The company anticipates reaching production of around 300,000 ounces in 2024, with significant improvements expected from Block 10.
Nevada Project: The Nevada project is expected to produce as many as 500,000 ounces over a multi-year period at Tier-1 costs.
Quebradona Project: A world-class copper-gold deposit that provides optionality and exposure to the energy transition.
Dividend Declaration: An interim dividend of $0.22 per share has been declared, reflecting confidence in ongoing performance.
Production Growth Guidance: The company anticipates production growth of about 4% for the year.
Cash Cost Guidance: Cash costs per ounce are expected to remain flat at the midpoint, with potential full potential benefits offsetting inflation.
Sustaining CapEx Guidance: Sustaining capital expenditure is expected to grow slightly as investments in reserves development increase.
Growth CapEx Guidance: Growth capital expenditure is also expected to increase from last year's levels as investments continue in Nevada.
Free Cash Flow Expectations: Free cash flow is anticipated to more than double in the second half of the year.
Interim Dividend: Declared an interim dividend of $0.22 per share, equating to a payout ratio of 27%.
Free Cash Flow: Free cash flow of $206 million, a turnaround from an outflow of $205 million in the previous year.
Free Cash Flow Before Growth Capital Expenditure: Free cash flow before growth capital expenditure was $337 million, a near fivefold increase year-on-year.
The earnings call reflects strong financial performance, with significant revenue and EBITDA growth, alongside a positive free cash flow turnaround. Despite some operational and supply chain challenges, management's optimistic outlook and proactive strategies to manage costs amid inflation are reassuring. The interim dividend and strong liquidity further support a positive sentiment. However, lack of specific revenue guidance could temper enthusiasm slightly. Overall, the market is likely to react positively, anticipating continued growth driven by new product launches and improved market conditions.
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