Anglo American announces operating profit of US$5 billion

Monday, Feb 22, 2010

Financial results

• Group operating profit⁽²⁾ of $5.0 billion ($4.5 billion from core operations⁽³⁾)
• Underlying earnings⁽⁴⁾ of $2.6 billion and underlying earnings per share of $2.14
• Profit attributable to equity shareholders of $2.4 billion
• Net debt⁽⁶⁾ maintained at $11 billion at 31 December 2009
• Committed undrawn bank facilities and cash of over $12 billion at 31 December 2009

Delivering operational efficiencies

• Asset optimisation and procurement delivered more than $1.6 billion of benefits in 2009
  ($1.4 billion from core operations), exceeding target
  • Asset optimisation and procurement target of $2 billion now to be delivered from core businesses alone by 2011
• Anglo Platinum – significant restructuring achieved, flat cash operating costs target met, 3 high cost shafts on care and maintenance, labour productivity up 21% in 2 years
• Significant cash cost reduction of $712 million (5%) and productivity improvements achieved across the Group – headcount reduced by 23,400⁽⁷⁾

Creating a more effective, focused business

• Major Group reorganisation completed, creating new generation of leadership within a leaner, more effective structure
• Board strengthened and refreshed – new chairman and 3 new non-executive directors to bring further mining, commercial and financial expertise
• Divestment programme under way – running businesses to maximise value; sales of Tarmac’s European aggregates and Polish concrete products businesses agreed with expected proceeds of approximately $400 million; Zinc sale process initiated with significant buyer interest

Clear strategy driving targeted, high quality growth of selected commodities

• $17 billion of approved projects in most attractive commodities to drive organic production growth of more than one third by 2013:
  • Copper to grow by 33%; iron ore by 82%; nickel by 139%
  • Development of four key strategic projects on track: Minas Rio, Los Bronces, Barro Alto and Kolomela (previously Sishen South)
  • New growth projects: Quellaveco (copper) and Grosvenor (metallurgical coal) – first stage approvals expected in 2010

Step change in safety performance

• New safety practices embedded and delivering further improved results:
  • 57% reduction in fatalities since January 2007
  • 52% improvement in lost time injury rates since January 2007, on a like-for-like basis
  • Anglo Platinum achieved 4 consecutive fatality-free months through to January 2010

Dividend

• Resumption of dividend expected in respect of 2010

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Source: Anglo American