Anglogold Ashanti PLC - $AU - Earnings Analysis: Significant growth in free cash flow and adjusted EBITDA.

Business Model

AngloGold Ashanti generates revenue primarily through the sale of gold. Revenue is also generated from by-products such as silver, copper, and sulphur.

Revenue Sources

• Gold Sales: Main source of revenue
• By-product Sales: Revenue from silver, copper and sulphur

Income Statement Analysis

• Revenue increased by 39.3% due to a higher average gold price received.
• Gross profit increased by 116.2% reflecting higher revenues and effective cost management.
• Profit before taxation significantly increased due to higher revenues, lower losses on derecognition of assets, and favorable foreign exchange adjustments.
• Profit attributable to equity shareholders increased substantially due to higher gold prices and improved operational performance.

Balance Sheet Analysis

• Total assets increased significantly, mainly due to the acquisition of Centamin.
• Total equity increased substantially reflecting improved profitability and new equity from the Centamin aquisition.
• Total liabilities also increased, but at a slower pace than equity. This indicates improved financial leverage.

Cash Flow Analysis

• Net cash inflow from operating activities increased due to higher average gold price received.
• Net cash outflow from investing activities decreased due to lower capital expenditure.
• Net cash outflow from financing activities increased mainly due to repayment of borrowings.
• Free cash flow increased, reflecting effective cost management and successful capture of higher gold prices.

Capital Allocation

Revised dividend policy of paying out 50% of free cash flow. Excess cash flows will be allocated either through potential share buybacks or supplemental returns

Management Commentary

What we could control, we controlled very well. And what we couldn't control, we made the best out of it.

We are pleased with the results

We think it's a compelling dividend policy.

Overall Sentiment: Positive

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results. Investing in securities involves risks, including potential loss of principal. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.