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Carroll bullish on Anglo outlook

Feb 22 2010 09:16 Jan de Lange*

Company Data

Anglo American Plc [JSE : AGL]

Last traded R261.89
Change R-3.11
% Change -1.17%
Cumulative volume 4.99m
Market cap R351.71bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - Anglo American's [JSE:AGL] prospects are outstanding and the company is well positioned for the better times ahead in the resources cycle, says CEO Cynthia Carroll.

Her success in effecting cost savings in the past year and the potential for Anglo's three big existing projects have, for now at least, silenced the harsh critics who have been demanding her head for the past year.

On Friday there was no sign of the former enmity. Louis Venter, an analyst at Anglorand, says he was troubled a year ago, but things don't look too bad after Friday's presentation of the Anglo results.

At the London presentation Sir John Parker, the distinguished Briton who assumed the chairmanship last year, said the presentation indicated the scale and extent of the transformation under way at Anglo American, as well as the opportunities for real growth and value-creation as the organisation heads into the future.

Responding to a question on whether she believed there was now sufficient distance between Anglo and efforts by Xstrata chief executive Mick David to merge the two companies, Carroll responded that Anglo had pretty convincingly shown it could transform.

Anglo's operating profit fell 51% to $5bn in the year, while Xstrata fared slightly better with a 38% decline to $4.48bn.

But Anglo is more exposed to the platinum group metals and diamonds than Xstrata, and has therefore been harder hit.

The 20% reduction in Anglo Platinum's workforce over the past year, and the 30% since the recession started in August 2008, has been impressive. This while platinum output remained constant at 2.4m ounces.

The changes at Anglo relate to three principal areas: a flatter organisational structure, which brings the corporate head offices closer to the group's business units; stronger industrial performance; and a more vigorous growth portfolio.

The 2 700 head office posts dispensed with will alone bring a saving of $120m a year.

At the industrial level, a cost saving of 5% was achieved across the group, considerably boosting productivity. Other savings such as asset optimisation yielded $863m, compared with a target of $700m set for the year.

*The writer owns shares in Anglo American.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 
 
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