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Anglo American to cut 19,000 jobs after profits fall

Anglo American to cut 19,000 jobs after profits fall
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First Published: Fri, Feb 20 2009. 02 24 PM IST
Updated: Fri, Feb 20 2009. 02 24 PM IST
London: Mining group Anglo American Plc scrapped its 2008 dividend to conserve cash and said it will cut 19,000 jobs as it posted a 1% fall in profit, missing analysts’ forecasts.
In Johannesburg, its shares tumbled 6.9% to 169.60 rand by 1:10pm underperforming a 3.6% fall in the blue-chip Top 40 index.
Anglo shares have underperformed the UK mining index by 20% so far this year and closed in London on Thursday at 1,236 pence.
The firm - the world’s dominant platinum producer and fourth-largest iron ore exporter - said it planned to cut 19,000 jobs by the end of the year. This represents about 10% of the total workforce of 190,000, based on figures on its website.
“As we begin 2009, the economic outlook remains weak, with limited visibility and we are continuing to experience volatility and downward pressure on commodity prices,” chief executive Cynthia Carroll said on Friday.
“Notwithstanding the other measures we have taken, the board has decided to suspend dividend payments in order to preserve the group’s strategic growth options.”
The group, which also mines industrial metals like copper, coal and diamonds and platinum, said on 17 December it was cutting capital spending in 2009 by more than half to $4.5 billion and postponing some mine projects to conserve cash.
Anglo , the world’s fourth-biggest diversified mining group by market value, said on Friday earnings per share before exceptional items fell to $4.36 from $4.40 in 2007.
The group, which focuses on southern Africa, said operating profit fell 0.3% to $10.09 billion.
The group said its net debt at the end of 2008 was $11.04 billion and said it has agreed to provide a loan to diamond giant De Beers, in which it owns 45 percent, of $225 million this year.
It did not announce any plans to raise further funds, unlike rivals Xstrata and Rio Tinto, which are more highly geared than Anglo.
The group has so far this year further cut its stake in former majority-owned AngloGold Ashanti to 11.88% from 16.3%, raising $434 million.
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First Published: Fri, Feb 20 2009. 02 24 PM IST