AngloGold Ashanti’s Record Cash Growth Sparks Dividend Boost for Shareholders

AngloGold Ashanti has delivered a staggering nine-fold increase in free cash flow, reaching $942 million in 2024, up from $109 million in 2023. The company credits this dramatic rise to operational efficiency improvements, strong gold production, and a favorable gold price environment.

CEO Alberto Calderon highlighted the company’s focus on cost control and efficiency, which positioned it to capitalize on higher gold prices. “The significant growth in free cash flow—to almost a billion dollars in 2024—is a result of our focus on continued operational and efficiency improvements, which in turn have allowed us to capture the benefit of a healthy gold price,” Calderon stated.

The company also saw a 93% surge in adjusted EBITDA, which hit $2.75 billion, compared to $1.42 billion in 2023. EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, is a measure of a company’s overall profitability before accounting for certain expenses.

This was supported by an increase in gold production, particularly from its managed operations and the successful integration of the newly acquired Sukari gold mine, which contributed 40,000 ounces to total output.

Headline earnings soared to $954 million, or 221 US cents per share, a remarkable turnaround from the $46 million loss reported in 2023. The average gold price received per ounce increased 24% to $2,394/oz, up from $1,930/oz in 2023.

Despite inflationary pressures, total cash costs per ounce rose modestly by only 4% to $1,157/oz, reflecting disciplined cost management. Total cash costs refer to the expenses involved in mining and processing gold, excluding taxes and interest payments.

As a result of its improved financial position, AngloGold Ashanti announced a new dividend policy, increasing its payout ratio to 50% of free cash flow, subject to maintaining a leverage ratio of 1.0 times adjusted net debt to adjusted EBITDA.

For 2024, the company declared a total dividend of $439 million, amounting to 91 US cents per share, including an interim dividend of $347 million, or 69 US cents per share. A dividend is a payment made to shareholders as a share of company profits, and this significant increase signals confidence in the company’s financial strength.

The company’s adjusted net debt fell to $567 million, bringing its net debt-to-EBITDA ratio to 0.21x, the lowest since 2011. This ratio indicates how much debt the company has in relation to its earnings and suggests that AngloGold Ashanti is in a strong financial position. The company also ended the year with $2.6 billion in total liquidity, including $1.4 billion in cash and cash equivalents, ensuring it has ample resources for future investments.

Looking ahead, AngloGold Ashanti expects gold production to range between 2.9 million and 3.2 million ounces in 2025, with total cash costs forecasted between $1,125/oz and $1,225/oz.

Source: SKB Journal

Last Updated on February 21, 2025 by samboad