On August 15, AngloGold Ashanti Limited (ADR) (NYSE:AU) will provide the public with its H1 2016 results.
On June 30, the gold producer published its trading statement which disclosed they are positive the H1 2016 results will be at least 20% different from those of H1 2015, according to the listing requirements of JSE Ltd.
AngloGold Ashanti Limited expects to report higher headline earnings and headline earnings per share than those of H1 2015, respectively, 167% and 177%. During the period, the settlement of foreign denominated debt lead to a loss of 15 cents per share.
In spite of a 7% decline in H1 2016 gold production (from 1,878koz to 1,745koz), the company expects to report higher earnings thanks to:
- the higher gold price which rose 1.5% year-over-year basis (from an avg. of $1,204/oz in H1 2015 to an avg. of $1,222/oz. in H1 2016),
- weaker operating currencies in South Africa, Brazil, Australia, and Argentina,
- continued focus on controlling the cost across its entire portfolio of operations (AISC decreased with 1.4% from $924/oz in H1 2015 to $911/oz in H2 2015),
- interest saving of $33 million after the repurchase of 8.5% bonds with a face value of $779 million due to 2020 with the proceeds from the sale of its Cripple Creek & Victor mine in the U.S. to Newmont Mining Corp.
AngloGold Ashanti is proving to be a good player in the mining industry because the company continues to cut operating costs and reduce debt (in line with its strategy to reduce its annual interest charge). This has already resulted in an improvement in the net debt adjusted EBITDA ratio and therefore, is improving its financial situation.
The postponement of interest hikes by the Fed is putting more pressure on the price of gold and AngloGold Ashanti is well positioned to benefit from it.
