CAPITAL MARKETS

AngloGold flags lower earnings after 'challenging' 2021

GOLD major AngloGold Ashanti expects its headline earnings for 2021 would be up to 42% lower year-on-year as falling production and rising costs took their toll on its bottom line.

 AngloGold's Obuasi operation in Ghana

AngloGold's Obuasi operation in Ghana

The miner said headline earnings for the period would be between US$572-642 million, with headline earnings per share of $1.37-1.53, down 36-42% year-on-year. The earnings per share figure was up to 14% below consensus expectations of $1.59.

Johannesburg-listed companies are required to pre-report if they believe financial results will differ by more than 20% from the previous reporting period.

AngloGold has endured a challenging year, with its Obuasi mine in Ghana offline since May and rising operating costs eating into profits.

AngloGold expects production for 2021 to come in at 2.47 million ounces of gold, putting it at the lower end of the revised guidance range of 2.45-2.6Moz issued in August but down 18.9% year-on-year - a drop driven by the sale of the company's South African operations, lower grades, the Obuasi outage and "the continued impact of the COVID-19 pandemic on production and costs".

The company received another blow late October when the Colombian regulator archived AngloGold's environmental license application for its Quebradona copper-gold project, a decision the company has since appealed.

Shares in AngloGold have fallen 16% on the JSE over the past year.

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