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AngloGold’s Full-Year Profit Drops 29% as Strikes Cut Output

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Feb. 20 (Bloomberg) -- AngloGold Ashanti Ltd., the world’s third-biggest producer of the metal, said profit fell 29 percent in 2012, missing analysts’ estimates, after a strike that shut its South African mines cut production.

Adjusted earnings excluding one-time items dropped to $924 million, or $2.39 per share last year compared with $1.3 billion, or $3.36 per share 12 months earlier, the Johannesburg-based company said in a statement today. That compares with the $3.03 median prediction of 14 analysts surveyed by Bloomberg.

Pay strikes that started in the platinum industry in August spread to gold, coal and chrome producers last year, cutting mining output by 10.1 billion rand ($1.1 billion), according to South Africa’s National Treasury. AngloGold, which mines about a third of its metal in the country, retains the option of placing these assets into a separate company should investors undervalue the business, Chief Executive Officer Mark Cutifani said on Nov. 21.

“The weaker performance in earnings, cash flow largely reflects challenges at South Africa operations through course of year including several safety-related stoppages in the first half and the unprotected strike action in the second half,” the company said.

AngloGold, whose largest overseas competitors are Barrick Gold Corp. and Newmont Mining Corp., said gold production fell 17 percent to 859,000 ounces in the quarter compared with the prior three months. It produced 3.94 million ounces for the year, missing its target of 4.3 to 4.4 million ounces.

Total cash costs per ounce rose 14 percent to $1,009, it said.

Output at all of its South African mines halted because of work stoppages, spurring the company to cut its third-quarter dividend in half and trim annual spending plans by $200 million.

The company will pay a dividend of 0.50 rand a share for the fourth quarter matching the payout in the previous three months, it said.

Cutifani is leaving AngloGold to replace Cynthia Carroll as CEO of Anglo American Plc on April 3.

Profit for the fourth quarter dropped $0.02 a share from $0.61 in the previous quarter, That compares with the 47-cent median estimate of five analysts surveyed by Bloomberg. Gold analysts in South Africa compare quarters sequentially.

To contact the reporter on this story: Ana Monteiro in Johannesburg at amonteiro4@bloomberg.net

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net

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