BLBG:AngloGold Quarterly Profit Jumps by 68% as Demand Drives Prices to Record
AngloGold Ashanti Ltd. (ANG), the world’s third-largest gold miner, said second-quarter profit rose 68 percent as demand for the precious metal as a safe-haven investment drove prices to records.
Earnings excluding one-time items rose to $342 million, or 89 cents a share in the three months ended June 30, from $203 million, or 53 cents a share in the first quarter, the Johannesburg-based company said in a statement today. The median estimate among six analysts surveyed by Bloomberg was for adjusted earnings of 63 cents a share.
Gold rose 8.6 percent to an average $1,508.06 an ounce in the second quarter from the first, gaining 5.5 percent in local currency terms. Bullion advanced to a record $1,672.80 in London yesterday as some investors preferred the metal to equities or currencies amid signs the U.S. economy is faltering and slower growth may worsen Europe’s debt crisis.
Chief Executive Officer Mark Cutifani and his counterparts at South African rivals Gold Fields Ltd. and Harmony Gold Mining Co. are trying to boost production even as mines get deeper and more costly to operate. The three agreed to raise workers’ pay by as much as double the country’s 5 percent inflation rate after a strike halted mines for five days from July 28. Average power prices jumped 26 percent this year.
Second-quarter production rose to 1.09 million ounces. Floods in Australia and Namibia cut first quarter output to 1.039 million ounces.
AngloGold, which also has mines in Australia and Brazil, in May targeted production of 1.09 million ounces at a cost of $760 an ounce in the second quarter, and annual output of between 4.55 million and 4.75 million ounces.
AngloGold and Barrick Gold Corp. (ABX), the world’s largest producer, last year scrapped the last of the contracts that bound them to sell gold significantly below the current price of the metal. The contracts had been agreed years earlier when gold wasn’t expected to rise as much as it has.
Analysts compare results of South African miners with the prior quarter rather than the previous year.
To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
