AngloGold Ashanti announces earnings that could rise to $416m

Anglogold Ashanti has posted healthy earnings from gold sales and other production activities.

The company has indicated to shareholders that they have reasonable certainty that headline earnings for the period are expected to be between $392 million and $416 million, with headline earnings per share(“HEPS”) of between US 94 cents and US 99 cents.

Headline earnings and HEPS for the comparative period in 2019 were $120 million and US 29 cents, respectively.

The total basic earnings from continuing and discontinued operations (“basic earnings”) for the period are expected to be between $410 million and $432 million, resulting in total basic earnings per share from continuing and discontinued operations (“EPS”) of between US97 cents and US102 cents.

The basic earnings and EPS for the comparative period were $114 million and US 27 cents, respectively.

The expected overall increases in headline earnings and basic earnings for the Period compared to the comparative period were primarily due to the following reasons; the gold price received increased by more than 25%; weaker local currencies mitigated increases in cost of sales; higher foreign exchange gains of $19 million; income from joint ventures, mainly Kibali, increased by $41 million (post-tax) or US 10 cents per share; and care & maintenance costs of $21 million (post-tax) or US 5 cents per share incurred at Obuasi in the prior year were not repeated in the current period.

The increases in earnings were partly offset by higher taxes, withholding taxes and royalties paid in most jurisdictions and deferred taxes raised in Brazil on foreign exchange movements relating to non-monetary assets; negative movements on realised and unrealised oil and gold derivatives of $18 million (posttax) of US 4 cents per share.

Another reason for the increase is the discounting of the Argentine export duties receivable resulted in a decrease in earnings of $11 million (post-tax) or US 3 cents per share, and a Brazilian power utility legal settlement received in April 2019 of $11 million (post-tax) or US 3cents per share not repeated in the current period.

In addition to the above, earnings were favourably impacted in the current Period by $17 million (posttax) relating to the non-cash impairment reversal on the South African producing assets and related liabilities classified as held for sale as a result of the agreement to sell these assets to Harmony Gold.