JOHANNESBURG – AngloGold Ashanti, which exited South Africa when it sold the Mponeng Mine to Harmony Gold Mining Company earlier this month, hiked its dividend payout and reduced debt during the year ended December 2019 on the back of the robust gold price.
The JSE-listed group said on Friday that it had approved a 57 percent higher payout to shareholders to a R1.65 a share dividend or 11 US cents a share in 2019 compared with 95 South African cents a share or 7 US cents a share in 2018.
Chief executive Kevin Dushnisky said: “The board is satisfied that subsequent to the dividend declaration, the company has adequate balance sheet flexibility and sufficient funding facilities available to withstand market volatility. The increase in the dividend reflects management’s commitment to improving shareholder returns, while maintaining a disciplined capital allocation.”
AngloGold said adjusted net debt fell 5 percent to $1.581bn in 2019, compared with $1.65bn in 2018. Free cash flow jumped 90 percent to $127m in 2019, compared with $67m in 2018 as the gold price received was 10 percent higher at $1 387 an ounce from $1 261 an ounce a year earlier.
Dushnisky said the windfall from the higher gold price would be used to develop its ore reserves.
“We’re working hard to deliver on our strategy and to capture the wider margin in this strong gold price environment. We’re generating strong cash flow from our operations and that’s allowing us to increase returns to shareholders, strengthen our balance sheet and invest in our ore bodies.”
The cash flow would have been higher if the company had managed to repatriate $202m in the Democratic Republic of Congo (DRC).
“We expect to get that released very soon,” said Dushnisky.
AngloGold, which owns a 45 percent interest in the Kibali mine in the DRC, repatriated $75m from that country of which $23m was received in the fourth quarter of 2019.
The company reported a $12m, or 3 US cents per share, basic loss for the year, compared with a basic profit of $133m, or 32 US cents a share, owing to the $385m non-cash impairment charge related to the sale of its South African assets. The company also reported higher rehabilitation provisions in Brazil and the maintenance costs in South Africa and Ghana.
Excluding impairment charges, headline earnings were $379m, or 91 US cents per share, compared with $220m, or 53 US cents per share, in 2018.
AngloGold’s shares closed 6.56 percent higher at R338 on Friday.