AAL Anglo American Plc

By Scott Patterson 

Buoyed by booming commodity prices and lower costs, Anglo American PLC doubled its net profit for 2017, slashed debt and said it would pay its highest dividend in a decade.

The strong results for Anglo American mark a decisive turnaround from two years ago, when the mining giant, hammered by plunging commodities and hamstrung by a debt load of nearly $13 billion, began a dramatic corporate downsizing.

Now the company is raking in cash and promising to maintain firm discipline on spending, a consistent theme among miners burned by the sharp downturn.

Anglo American said Thursday it would declare a final dividend of 54 cents a share, making an annual payout of $1.02 a share.

Net profit for the year ended Dec. 31 was $3.17 billion, up from $1.59 billion in 2016. A consensus estimate compiled by data provider FactSet forecast net income for the year of $3.25 billion.

Shares in the company initially traded rose more than 3% higher before reversing gains to be down 4% in morning trading in London.

"Growth has been a dirty word in our industry," Anglo American Chief Executive Mark Cutifani told reporters on a media call Thursday, adding that the company would focus on continuing to reduce debt and return cash to shareholders.

"The lessons of the last 10 years sit very comfortably with us," Mr. Cutifani said.

Lower debt levels at Anglo American "should give further confidence in Anglo's renewed financial strength," said Paul Gait, an analyst at Sanford C Bernstein.

Anglo American said annual revenue rose 22% to $26.24 billion, while net debt fell to $4.5 billion by the end of the year, from $8.5 billion at the end of 2016.

Over the past 12 months, copper prices have gained about 20% and coal has climbed about 12%.

The company reported solid gains across its commodity portfolio, including copper, platinum, iron ore and coal. However, it said rising costs had cut into adjusted earnings by about $400 million.

Diamond production at De Beers -- in which Anglo American holds an 85% stake -- grew 22% to 33.5 million carats, and forecast diamond production in 2018 in a range between 34 million and 36 million carats.

Write to Scott Patterson at scott.patterson@wsj.com

(END) Dow Jones Newswires

February 22, 2018 04:46 ET (09:46 GMT)

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