AngloGold: Free cash flow with massive growth

The South African gold producer AngloGold Ashanti (WKN 164180) reported a massive increase in free cash flow! Pre-growth free cash flow, which the company uses to calculate its dividends, rose 376% to $ 324 million in the first half of 2020, with much of it coming from the second quarter.

In the same period in 2019, AngloGold had “only” generated $ 68 million in free cash flow.

According to the company, production in the first half of the year reached 1.469 million ounces at a total cash cost of $ 810 per ounce. Last year it had 1.554 million ounces at a cash cost of $ 792 an ounce. AngloGold stated the so-called “all-in sustaining costs” for the first six months of 2020 at 1,031 dollars per ounce. In the same period of the previous year, these were at $ 1,002 an ounce.

The negative impact of the COVID19 pandemic was limited to an estimated 85,000 ounces of lost production in the first half of the year, including 63,000 in South Africa. The AISC rose $ 53 an ounce due to the effects of the pandemic.

Second quarter gold production, AngloGold continued, increased 5% to 753,000 ounces compared to the first three months of 2020. The company reported EBITDA of $ 1.096 billion for the first six months of the year, up 59% from $ 689 million in the first half of 2019.

As AngloGold further announced, the strong cash flow helped to further reduce liabilities. The ratio of adjusted net debt to adjusted EBITDA was 0.67x at the end of the half-year, which is well below the targeted level of 1.0x. Adjusted net debt was down 18% to $ 1.428 billion.

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