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Anglo American will announce its full-year earnings on 16 February, and investors are expecting revenue of $20.4 billion and adjusted net income of $870 million. These forecasts represent a 24% fall in revenue and a 60% drop in adjusted net income. The miner will report its second-half numbers on the same date, and traders are anticipating revenue of $8.27 billion and adjusted net income of $155 million, which compares with the first-half revenue and adjusted net income of $11.55 billion and adjusted net income of $904 million.
Drastic times call for drastic measures which is what Anglo American has delivered. The company has been one of the biggest casualties of the collapse in commodity prices – as far as major miners go – and its overhaul has just begun. Anglo American is going to be reduced to a fraction of its former size when all the asset stripping is completed. The focus has shifted to the company’s tier-one assets, and the cash raised from asset sales will be used to shore up its balance sheet. In these trying times, having a healthy cash position is crucial, but the market has not forgiven Anglo American for suspending its dividend. Without a cash return to shareholders and a gloomy outlook for the metals market, Anglo American will struggle.