AngloGold Ashanti has returned to profitability with a headline earnings of $99 million for the first six months of 2018 compared with a loss of $89 million in the first half of 2017. First-half profit attributable to equity shareholders was $33 million, as against a loss of $176 million last year.
The miner attributed the performance to its improved operating performance and higher gold price.
The result means Chief Executive Officer Srinivasan Venkatakrishnan will leave the company with his head held high as Kelvin Dushnisky, the current President of Barrick Gold Corporation replaces him on September 1.
“We continued to improve our portfolio, strengthen our balance sheet and increase productivity, all of which are the cornerstones of our strategy to improve free cash flow and returns over the long term,” Venkatakrishnan said.
“The business is in good shape – production is strong, costs are improving and our pipeline is well stocked with options.”
Free cash flow improved by $110 million to an outflow of $51 million in H1 2018 versus an outflow of $161 million during the same period last year. Positive free cash flow of $19 million.
The Company’s balance sheet also continued to improve, with debt falling, ample liquidity of around $2 billion, and no near-dated bond maturities. Net debt declined by 17 percent year-on-year to $1.786 billion at 30 June 2018, from $2.151 billion at the same time last year. The ratio of Net debt to Adjusted EBITDA at 30 June 2018 was 1.12 times, compared to 1.56 times at 30 June 2017, well below the covenant ratio of 3.5 times which applies under the revolving credit facilities.
AngloGold said the redevelopment of its Obuasi asset in Ghana was on track, with the issuing of environmental permits and the ratification by the Ghanaian parliament of the fiscal and regulatory agreements to reboot the mine.
“The ratification of investment agreements by Ghana’s parliament in June allowed the redevelopment of the high-grade Obuasi Gold Mine to commence in earnest,” the company said.