Costs related to layoffs, lawsuit, take toll on AngloGold results
South African AngloGold Ashanti (JSE:ANG), the world’s third-biggest producer of the precious metal, logged Monday a first-half loss as costs related to planned layoffs and funds set aside for a class action suit related to fatal lung disease silicosis, took a toll on the company’s bottom line.
Company set aside $47 million to cover cost of axing up to 8,500 jobs at its loss-making mines in South Africa.
The miner, Africa's top gold producer, reported a loss of $176 million in the six months to June 30, compared to a profit of $52 million in the same period last year, in line with the company's guidance.
Earnings were hit by an $86 million post-tax impairment related to some of the company’s South African mines, which made their first loss since 2012 in the first quarter of this year, as costs surged 44% and output slid.
Results also were affected by a $47 million set aside to cover the cost of axing up to 8,500 jobs at its loss-making mines in South Africa, as well as by another $46 million reserved to settle a silicosis class action lawsuit brought against a group of major miners in AngloGold’s home country.
The company kept its full year guidance untouched which means it expects production to decline to 3.6-3.75 million ounces, while spending is projected at $950 million to $1.050 billion.
Investors reacted negatively to the miner’s result with the stock closing down 2.6% in Johannesburg to 13,118 rand. The ADR was also trading down in New York and had lost 7 cents by 11:48 AM ET.