Anglo American PLC has released its preliminary financial results for 2024, reporting an underlying EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) of $8.5 billion. Despite a 10% decline in the group basket price and lower production volumes, The Company maintained a stable EBITDA margin of 30%. The results reflect a strong focus on cost efficiency and operational stability amid challenging market conditions.
Figure 1: Anglo American Released its Preliminary Financial Results for 2024
Strong Operational and Cost Performance
The Company achieved cost savings of $1.3 billion during the year, exceeding initial targets. CEO Duncan Wanblad stated, “We are fast transforming Anglo American into a far higher margin and more valuable mining company focused on exceptional copper, premium iron ore and crop nutrients assets and significant growth optionality.” He also highlighted The Company’s commitment to cash generation and sustainable shareholder returns.
The Company’s free cash flow increased to $1.7 billion in 2024, compared to $0.1 billion in the previous year. However, the bottom line was affected by impairments, resulting in a net loss attributable to equity shareholders of $3.1 billion.
Financial Performance and Market Conditions
- Revenue: Anglo American reported total revenue of $27.3 billion, an 11% decline compared to 2023. The Company attributed this to lower commodity prices and weaker demand in key markets.
- Net Debt: Net debt remained stable at $10.6 billion, equivalent to 1.3 times EBITDA, despite financial pressures and capital expenditures.
- Underlying Earnings: Earnings reached $1.9 billion, down from $2.9 billion in 2023, mainly due to lower market prices for iron ore, platinum group metals, and steelmaking coal.
- Shareholder Returns: The Company maintained total dividends of $0.8 billion, equal to $0.64 per share, consistent with its 40% payout policy.
- Impairments: The Company recorded net impairments of $3.8 billion, including a $2.9 billion reduction in De Beers’ carrying value, due to ongoing weakness in the diamond market.
Figure 2: Financial Statement showcasing Revenue and Underlying EBIDTA
Segment Performance Overview
The copper division performed well, with EBITDA rising to $3.8 billion from $3.2 billion in 2023. Higher copper prices and cost management initiatives contributed to this improvement, though production volumes declined due to lower grades at key operations.
Iron ore revenue declined due to lower market prices, leading to a drop in EBITDA from $4.0 billion in 2023 to $2.6 billion in 2024. Production at Kumba Iron Ore remained stable, but softer pricing affected overall profitability.
Steelmaking coal saw weaker financial performance, with EBITDA falling to $924 million from $1.3 billion in the previous year. The business faced lower sales volumes and pricing pressures.
The diamond division, De Beers, posted a negative EBITDA of $25 million, reflecting the downturn in global diamond demand. The segment faced a challenging trading environment, with high midstream inventories and cautious buying behaviour affecting sales.
Figure 3: De Beers, The Diamond Division of Anglo American
Portfolio Simplification and Divestments
Anglo American continued its strategic focus on portfolio simplification and high-value assets. The Company agreed to sell its steelmaking coal business for up to $4.8 billion in gross cash proceeds. Additionally, it finalised the sale of its nickel business for up to $500 million.
The planned demerger of Anglo American Platinum (AAP) is set for June 2025. The Company will retain a 19.9% stake in AAP initially to manage the transition and optimise value realisation. These moves are expected to improve Anglo American’s balance sheet flexibility and sharpen its focus on core assets.
Wanblad emphasised the significance of these portfolio changes, stating, “We are making excellent progress with our portfolio simplification. All of the above will deliver a step-change in our balance sheet flexibility.” The Company remains committed to strengthening its operational structure and aligning its portfolio with long-term growth opportunities.
Global Market Outlook
Anglo American expects continued volatility in the global commodities market. The Company is closely monitoring macroeconomic trends, including inflationary pressures, interest rate movements, and geopolitical developments. Despite these challenges, it remains optimistic about the long-term demand for its core commodities.
- Copper Expansion: The Company is investing in copper production growth, focusing on electrification and renewable energy demand. Copper remains a critical resource for infrastructure and energy transition projects.
- Iron Ore Stability: Demand for iron ore remains steady, particularly from China. The Company expects fluctuations in pricing but remains committed to operational efficiency in this segment.
- Diamond Market Challenges: The diamond sector continues to face weak consumer demand. Anglo American is focusing on inventory management and cost optimisation to stabilise De Beers’ performance.
Strategic Business Positioning
Anglo American is positioning itself as a high-margin, future-focused mining company. The Company is prioritising cost efficiency, strategic asset management, and selective growth investments to enhance shareholder value.
- Cost Efficiency Strategy: The Company is focusing on cost discipline and operational stability to navigate market fluctuations.
- Growth Projects: Selective investments will be made in high-margin assets that align with global demand trends, particularly in copper and crop nutrients.
- Sustainability Commitments: Anglo American remains committed to reducing emissions, improving water efficiency, and achieving responsible mining certifications.
CEO Duncan Wanblad reiterated The Company’s long-term vision, stating, “We have moved at pace to set up Anglo American as a highly attractive and differentiated value proposition for the long term, offering strong cash generation to support sustainable shareholder returns.”
The Company’s transformation efforts will continue in 2025, with a focus on cost efficiency, capital discipline, and portfolio optimisation. The evolving market landscape will shape Anglo American’s strategic decisions as it navigates the complexities of the global mining sector.
