×
By
Reuters
Published
Jul 31, 2009
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

AngloGold's second quarter earnings rise 11% on higher output

By
Reuters
Published
Jul 31, 2009

JOHANNESBURG, July 31 (Reuters) - AngloGold Ashanti (ANGJ.J), the world's No. 3 and Africa's top gold producer, reported on Friday 31 July an 11 percent jump in earnings for the second quarter due to higher output, beating market forecasts.



The company also whittled down its hedge book further by 1.4 million ounces, reducing its overall hedge commitment by the end of July to 4.47 million ounces, less than one year's production, in a bid to be more exposed to the spot price of gold.

But AngloGold said stoppages at some of its mines would lead to lower output this year, compared to its previous forecast.

AngloGold's (AU.N) adjusted headline earnings increased to $167 million, or 47 U.S. cents a share in the three months to the end of June, compared with $150 million, or 42 U.S. cents, in the first quarter.

Five analysts surveyed by Reuters had forecast average EPS of 37 U.S. cents, citing erosion of profits by a stronger rand.

"We saw a strong operating performance across most of the operations and a nice sweetener from our received gold price," Chief Executive Officer Mark Cutifani said.

"We're seeing the results of our interventions in the continued improvements at Obuasi (Ghana) and the early signs of a recovery at Geita (Tanzania) are also very encouraging for us."

The group, which has around 20 operations in four continents, said output during the second quarter rose to 1.127 million ounces at a total cash cost of $472/ounce, compared with 1.103 million ounces at $445/ounce in the prior quarter.

But safety stoppages, combined with mill repairs in the first quarter at Geita and lower-than anticipated recoveries from the Cripple Creek & Victor in the U.S., led to the lowering of AngloGold's full-year guidance to between 4.7 million ounces to 4.8 million ounces from its original target of 4.9 million ounces to 5 million ounces.

For the third quarter, AngloGold estimated production at 1.2 million ounces at a total cash cost of about $530 per ounce, assuming an average rand exchange rate of 8.10 rand per dollar.

South African gold miners sell their gold in dollars, and receive their earnings and pay their costs in rand.

(Reporting by James Macharia)

© Thomson Reuters 2022 All rights reserved.