AngloGold 4Q Loss Widens On Charge Against Assets
February 09 2009 - 3:21AM
Dow Jones News
AngloGold Ashanti Ltd. (AU), the world's third-largest producer
of the metal, Monday posted a sharply wider loss for the final
quarter of 2008 and the year as it took a $1.25 billion charge on
former Ashanti assets.
The Johannesburg-based company's production was also lower,
although ahead of earlier guidance for the fourth quarter.
AngloGold has been selling assets, cutting spending and getting
out of forward sales contracts priced below the current spot price
of gold since Mark Cutifani took over as Chief Executive from Bobby
Godsell in October 2007.
The company said it net loss for the final three months of the
year widened to 11.87 billion rand ($1.22 billion), or 3,336s, from
ZAR3.2 billion, or 1,150 cents a year earlier. The loss for the
year widened to ZAR16.11 billion from ZAR4.27 billion.
The fourth-quarter figure included asset impairment charges on
the Obuasi, Geita and Iduapriem operations added to the company's
portfolio when it completed the acquisition of Ghana-based Ashanti
Goldfields Company Limited in 2004. The charges relate to
assumptions about market conditions, such as higher power tariffs
in Ghana and reduced reserves at Geita.
Cutifani described 2008 as a year of restructuring that
repositioned AngloGold for growth. He said the hedge book had been
reduced by some 5.29 million ounces, or about 47% of committed
ounces, and the company's capital structure was strengthened
through the refinancing of a convertible bond with more recently
the sale of a one-third stake in Western Australia's Boddington
gold mine.
"After this transformational year we now have much improved gold
price leverage and balance sheet flexibility," he said.
Cutifani told reporters during a conference call the company was
still considering the sale of assets in Mali, although following a
turnaround over the last six months it was no longer looking to
exit assets in Argentina. He also said the company would continue
to "chip away" at its hedge book.
Production in the fourth quarter was 1.27 million ounces, down
on 1.37 million a year earlier but ahead of the 1.25 million ounces
forecast in AngloGold's third-quarter statement Oct. 30. Output for
the year was down 9% at 4.98 million ounces, including a drop of
230,000 ounces in South Africa due to power shortages and
safety-related work stoppages.
AngloGold said it expected output of 1.13 million ounces in the
first quarter of 2009 and production of between 4.9 million ounces
and five million ounces for the year.
AngloGold on Jan. 28 said it was selling its indirect stake in
Boddington to Newmont Mining Corp. (NEM) for as much as $1.1
billion, tightening its asset portfolio and strengthening its
balance sheet following the early repayment of a $1 billion
bridging loan. The loan was secured in November to repay a
convertible bond due Feb. 27. that if not covered would have meant
the possible firesale of assets.
At 0740 GMT, AngloGold's shares were trading 2.47% at
ZAR267.95.
Canada's Barrick Gold Corp. (ABX) is the world's biggest gold
producer.
Company Web Site: http://www.anglogoldashanti.com
-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848;
robb.stewart@dowjones.com