Incoming AngloGold Ashanti chief executive Kelvin Dushnisky will inherit a company on the front foot when he takes over the helm at the beginning of September after the group announced it will report profits of at least $91m (R1.2bn) for the six months ended June.
AngloGold, which expects to release its interim results later this month, is in the middle of a leadership succession.
Outgoing chief executive Srinivasan Venkatakrishnan departs at the end of this month for a role at London-based Vedanta Resources.
In a statement yesterday, the group said it expected to report positive results for the six months under review, which marked a turnaround from the losses reported for the comparative period.
“Shareholders are advised that the company has reasonable certainty that headline earnings for the period are expected to increase to a profit of between $91m and $108m,” the gold firm said.
“Headline loss and headline loss per share for the comparative period were $89m and 22 cents, respectively.”
AngloGold Ashanti shares gained 1.40 percent on the JSE yesterday to close at R116.96.
The company said the turnaround was attributed to an improved operating performance, reflected in the 4 percent improvement in production from retained operations, while it also recorded lower retrenchment costs, relating to the South African operations.
The group has been on a restructuring drive in recent years. It has either sold or closed most of its assets, most recently selling Moab Khotsong for $300m to Harmony Gold.
It has retained two operations – Mponeng and Mine Waste Solutions, a surface retreatment business – with the rest of its operations contained in South America, Africa and Australia.
Gold mining companies have had to weather low production with high production costs. Statistics South Africa said last month that gold production plunged 16.2 percent on an annualised basis in May.
Anchor Capital investment analyst Seleho Tsatsi said AngloGold had been diversifying geographically.
“The focus for the company has been expanding more outside of South Africa as its local production has decreased. When you look at the locally listed gold miners, AngloGold differs from most of its peers in that a sizeable portion of its operations are offshore,” Tsatsi said.
The world’s third-largest gold mining company by production last month cleared a major regulatory hurdle in its $500m investment in Ghana after it obtained environmental permits for its Obuasi operations.
Gold producers in South Africa are also facing protracted wage negotiations. NUM is seeking an increase to R9500 for entry-level surface workers, R10500 for entry-level underground miners and a 15 percent increase for officials.
Solidarity seeks a consumer price index plus 4percent or a 10percent increase, whichever is greater for every year negotiated.
Uasa said it wanted a wage increase of 10.5percent on actual basic and not on entry rate, while Amcu has called for entry-level salaries to increase to R12500. Solidarity’s Gideon du Plessis said the Mineral Council had raised its offer, but that it was still lacking.
Negotiations are expected to resume in the next two weeks.
BusinessReport
