Anglo American could be forced to cut dividend

Caitlin Morrison
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ANGLO American is believed to be preparing to cut its dividend after months of volatility in the commodities market.

Boss Mark Cutifani has been meeting with investors and warning them that continued low prices could necessitate a reduced payout.

The miner maintained its interim dividend in July, surprising analysts who had forecast a cut given the impact weak commodity prices have had on the company’s finances.

Anglo posted a $1.9bn (£1.2bn) pre-tax loss for the six months to 30 June, which it attributed to “sharply weaker commodity prices”. The group also slashed capital expenditure, and announced plans to cut other costs by $1.5bn before the end of next year.

Cutifani said: “We are ensuring that the business is sustainable through the commodity price cycles, as well as shorter-term price shocks, and offers investors attractive and differentiated exposure to the mining industry.”

After the results were announced in July, analysts at Canaccord Genuity said that, while they estimated an unchanged full-year dividend for 2015 and 2016, the 2015 dividend was “barely covered” by earnings estimates for the year and not covered by 2016 earnings forecasts.

A spokesman for Anglo American told City A.M.: “The next decision about dividend payments will be taken, as usual, by the board in February.”