After falling 6% on Tuesday‚ Anglo American shares have shed 74.7% over the past year on the London Stock Exchange and 67% on the JSE.At R69.30‚ the share price is back to a level last seen in 1999.
The year was a testing one for most commodities companies but the beating taken by Anglo American has been felt most severely in South Africa.
Anglo American‚ founded by Ernest Oppenheimer in 1917‚ once owned a big chunk of the JSE’s
market capitalisation‚ stretching beyond mining to industrial and retail companies. It still owns three major mining companies: JSE-listed Anglo American Platinum and Kumba Iron Ore‚ and unlisted De Beers Group.
Among analysts polled by the Financial Times‚ 12 rate Anglo as a “hold”‚ three as a “sell” and only one as a “buy”.
Early this month, Anglo American CEO Mark Cutifani announced an accelerated and more radical restructuring to focus only on assets able to generate free cash flow throughout the cycle.
He said about $4-billion (R61.5-billion) would be raised from disposals of non-core assets and the dividend would be suspended for the second half of 2015, as well as the 2016 financial year.
From 135000 employees on the payroll this year‚ the group would shrink over the next few years to only 50000 employees‚ mainly through the sale of assets‚ while the number of mines it owns would reduce from 55 to about 20 to 25.
London-based analysts at Liberum said in a note last week they expected that in the coming year Chinese imports of iron ore would turn negative and copper imports would stay at current levels.
This would lead to the closure of large mines around the world‚ cuts in capital expenditure and asset sales.
Liberum forecasts Anglo American’s underlying earnings for the year to December would fall to $656-million (R10.1-billion) from $2.2-billion (R34-billion) in 2014‚ and shrink further to $65-million (R1-billion) in the year to December 2016.
Anglo will report its year-end result on February 16. — BDlive
Anglo shares fall to 1999 level
At R69.30‚ the share price is back to a level last seen in 1999.
The year was a testing one for most commodities companies but the beating taken by Anglo American has been felt most severely in South Africa.
Anglo American‚ founded by Ernest Oppenheimer in 1917‚ once owned a big chunk of the JSE’s
market capitalisation‚ stretching beyond mining to industrial and retail companies. It still owns three major mining companies: JSE-listed Anglo American Platinum and Kumba Iron Ore‚ and unlisted De Beers Group.
Among analysts polled by the Financial Times‚ 12 rate Anglo as a “hold”‚ three as a “sell” and only one as a “buy”.
Early this month, Anglo American CEO Mark Cutifani announced an accelerated and more radical restructuring to focus only on assets able to generate free cash flow throughout the cycle.
He said about $4-billion (R61.5-billion) would be raised from disposals of non-core assets and the dividend would be suspended for the second half of 2015, as well as the 2016 financial year.
From 135000 employees on the payroll this year‚ the group would shrink over the next few years to only 50000 employees‚ mainly through the sale of assets‚ while the number of mines it owns would reduce from 55 to about 20 to 25.
London-based analysts at Liberum said in a note last week they expected that in the coming year Chinese imports of iron ore would turn negative and copper imports would stay at current levels.
This would lead to the closure of large mines around the world‚ cuts in capital expenditure and asset sales.
Liberum forecasts Anglo American’s underlying earnings for the year to December would fall to $656-million (R10.1-billion) from $2.2-billion (R34-billion) in 2014‚ and shrink further to $65-million (R1-billion) in the year to December 2016.
Anglo will report its year-end result on February 16. — BDlive
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