Anglo American profits fall 53pc to $4bn, but cost-cutting beats expectations

By Garry White, Mining Correspondent Published: 8:53PM GMT 19 Feb 2010

Anglo American

The company did not reinstate its final dividend but Cynthia Carroll, the company"s chief executive, said she would review its policy ahead of its interim results.

Revenues fell 25pc to £24.6bn in the year to December 31, after the fall in commodity markets at the end of 2008.

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Anglo"s nickel, platinum, iron ore, coal and diamond businesses all suffered as prices fell. Copper, however, was a bright spot, producing operating profits of $2bn as production increased 6pc and prices edged higher.

"Looking ahead, the medium and long-term outlook for the mining industry remains strong," Ms Carroll said. "Demand for commodities is expected to remain robust with the continuing shift in the pattern of economic growth towards fast-growing emerging economies."

The miner expected demand to grow in China, India and Brazil.

The company also made better-than-expected progress on its cost cutting initiatives. Anglo said that asset optimisation and procurement delivered more than $1.6bn of benefits in 2009. The company reduced its headcount by 23,400 over the course of the year.

Ms Carroll and Sir John Parker, Anglo"s new chairman, are under pressure to cut costs after the company rejected a proposed nil-premium "merger of equals" from Mick Davis" Xstrata last year. Anglo has targeted $2bn of cost savings over two years.

Earlier this week the miner announced the sale of Tarmac"s European aggregates and Polish concrete products businesses for around $400m. The group has agreed to take part in rights issues at its listed subsidiaries to recapitalise their balance sheet. Anglo Platinum, which is 80pc owned by Anglo, is raising $1.6bn from shareholders, with 45pc-owned De Beers raising a total of $1bn.

Net debt was held at $11bn and the company said cost control continued to be a major focus.