Anglo American’s losses jump 161 per cent after $3.9bn asset writedown

first_img Billy Ehrenberg The figuresThe commodities slump has crushed Anglo American: the miner posted figures today showing it took $3.9bn (£2.5bn) in impairment charges in 2014 after it was forced to dramatically cut the prices of its assets.The pain didn’t stop there. With iron ore prices having halved in 2014 it was always going to be a tough 12 months: profits before tax dropped 115 per cent from $1.7bn to a loss of $253m. The loss for the financial year attributable to shareholders was greater still: a $961m loss in 2013 turned into a $2.5bn loss in the 2014 financial year; a drop of 161 per cent.  Why it’s interestingThe weakening Chinese economy has thrown many commodities companies under the bus. Yesterday Rio Tinto, the Australian miner, defied the conditions to pay out $2bn to shareholders through a share buyback. But Anglo’s assets writedown came as no shock: it warned in January it would have to impair the value of some of its assets, with coal and iron ore, two commodities for which China has a certain fondness.Some $3.5bn of the writedown came from just one iron ore project: Minas Rio in Brazil, which includes a 530km pipeline. Anglo has only just bought Minas Rio online.Anglo American saidMark Cutifani, chief executive of Anglo American, said:Despite the headlines of economic uncertainty and geopolitical tensions, the underlying fundamentals of our business – applying world class technical skills to world class assets – remain attractive over the long term. In the immediate term, I expect tough trading conditions to prevail during 2015, but we are determined to continue to build on our already very significant operational improvements, drive towards an effective and efficient organisation and culture, and to be unwavering in our capital disciplineIn shortAnglo is trying to cut costs where it can to ride out the storm: for example it expects to complete the Minas Rio project at $400m under budget. Nevertheless, 2015 looks set to be a very trying year, and commodities prices may set low for the medium to long term. Anglo American’s losses jump 161 per cent after $3.9bn asset writedown whatsapp Tags: Anglo American Company Friday 13 February 2015 2:39 am Show Comments ▼ whatsapp More From Our Partners A ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgSupermodel Anne Vyalitsyna claims income drop, pushes for child supportnypost.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.org‘Neighbor from hell’ faces new charges after scaring off home buyersnypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.org Share last_img read more

Read More »