Analyst Note
| Mathew Hodge, CFA |No-moat Anglo American’s first-half 2022 result was driven by lower prices, lower production, and higher unit costs, partially offset by foreign exchange. Adjusted net profit after tax was USD 3.8 billion, or USD 3.11 per share, down from USD 5.2 billion in the first half of 2021 and modestly higher than our estimates. Adjusted EBITDA fell to USD 8.7 billion, down 29%. The USD 3.4 billion adjusted EBITDA decline was mainly due to iron ore (down USD 2.7 billion), platinum group metals (down USD 1.7 billion) and copper (down USD 770 million). This was partially offset by improved results from metallurgical coal (up USD 1.5 billion) and diamonds (up USD 330 million). Production volumes fell 9% versus the first half of 2021 due to weather in Brazil and South Africa (iron ore) and Australia (metallurgical coal), with metallurgical coal production also affected by the Grasstree mine in Queensland closing in January 2022. In aggregate, lower commodity prices and higher costs accounted for most of the EBITDA reduction.