AngloGold Ashanti doubles dividend payouts as profits soar

Multinational gold miner AngloGold Ashanti has announced that it will double its dividend payout ratio following an increase in its profits and reduced debt.

A rise in global gold prices is responsible, with the price of the precious metal surging to record highs of above $2,000 an ounce in the beginning of the year due to disruptions caused by the coronavirus pandemic.

The South African based firm’s shares rose 8.7% to $24.7 and the firm said it would now pay shareholders 20% of free cash flow before growth capital expenditure, up from 10%, and would make both annual and semi-annual dividend payments.

 “Doubling our dividend payout ratio demonstrates confidence in our ability to both improve direct returns to shareholders and to self-fund our growth projects and sustaining capital requirements,” said AngloGold Ashanti interim Chief Executive Officer Christine Ramon.

AngloGold is a multinational gold mining company that owns mines in Ghana and Mali, as well as in three other continents. Cash flows quadrupled year-on-year for the third quarter ended Sept. 30.

“Our forecasts now imply a 3.2% dividend yield for 2021, versus 1.1% previously, which compares very well versus global peers at <2%,” RBC analyst Tyler Broda said in a note.

Ramon said the company would return value to shareholders, invest in its current ore bodies and fund greenfield and brownfield projects.

“There is significant optionality in our portfolio, there is no need to look outside,” said Ramon.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the quarter rose 72% to $803 million from last year, with production rising 1% to 837,000 ounces despite pandemic-related disruptions and stoppages.

AngloGold reinstated its annual output forecast in September, to between 3.03 million ounces and 3.10 million ounces, including output to the end of the quarter from its South African assets which it sold to Harmony Gold.

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