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Anglo American share price: CEO hints at more to come beyond dividend

Anglo American Share Price

The Anglo American share price (LON:AAL) is up by 4.91% during the afternoon session on Thursday as rising commodity prices helped the miner record its best H1 profits in its over 100-year history. Today’s movement is a continuation of a mini-surge over the past five days which has seen the FTSE 100 mining company add 11.03%.

Looking back over the past five years, Covid aside, it has been smooth sailing for the Anglo American share price, which is up by 296.23% over the time period. However, investors will do will to remember the cyclical nature of mining stocks. After all, the Anglo American share price has not reached its high of around ten years ago, when it was above 3,300p.

Results

Anglo American, whose portfolio spans diamonds, platinum, copper, iron ore & more, reported profits before tax of $10.1bn for six months ending in June. This figure is up from $1.7bn compared to the same period a year ago.

“The first six months of 2021 have seen strong demand and prices for many of our products as economies begin to recoup lost ground, spurred by stimulus measures across the major economies,” said Anglo chief executive Mark Cutifani.

Among the main factors in improving Anglo American’s profit were iron ore, the commodity used to make steel, as well as the London-listed company’s platinum-group metals (PGM). The average market prices for Anglo’s commodities rose by 62% in H2, compared to a year ago.

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The subsequent cash generated from those sectors enabled Anglo to reduce its net debt to $5.6bn, down from $7.6bn. In addition, Anglo was able to make a substantial payout to shareholders.

Dividend

Following its record half-year profits, Anglo American is to return $4.1bn to its shareholders.

Anglo declared a $2.1bn ordinary dividend, as well as confirming it will return an additional $2bn of “excess cash” to shareholders via a $1bn special dividend and a $1bn share buyback.

“The share buyback should tell you that we don’t think this is as good as it gets,” said Mark Cutifani, which could be music to the ears of investors.

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