ricevo e giro
R:
Dear Sir,
The weakness is due to the announcement of their 2013 guidance (full article below).
As there is some temporary pressure, the weakness may continue this is why for some client who wanted to reduce their risk, we have recommended to make a switch into less volatile issuer.
Kind regards,
Alexis
Latest Announcements from Anglo Gold
Anglo Gold released guidance for 2Q13. Key takeaways:
- ANG announced that it expects to impair $2.2-2.6bn post tax in relation to the revaluation to net realizable value of its mining assets. This follows similar announcements of impairments by some of its peers; e.g. HAR and NCM.
- Anglogold also announced that they will produce 4 million to 4.1 million ounces, less than the 4.1 million to 4.4 million ounces previously expected,
- Anglogold also revised their revenue & income expectations for the years to come due change of assumptions of gold prices
- The company produced 935,000 ounces of gold at cash costs of $900 to $920 an ounce in the second quarter.
Gold Industry
- This has been a general trend in the industry: Gold mining companies have announced at least $11 billion in charges during the past two months, after the precious metal’s steepest quarterly drop in at least 90 years. Barrick Gold Corp., the biggest producer, said June 28 it expects to write down the value of a delayed Latin American project by as much as $5.5 billion and is reviewing other assets for potential charges. Australia’s Newcrest Mining Ltd. said last month it might take a charge of as much as A$6 billion ($5.5 billion).
Downgrades
- Moody’s Investors Service cut AngloGold’s debt rating by one step to Baa3, the lowest investment grade, last week.
- S&P lowered Anglo Gold's rating to BB+ from BBB-
Rating Agency key points
- "We view the company's free operating cash flow (FOCF) and credit metrics as particularly sensitive to a low gold price environment, given its high unit cash cost profile and high capital expenditure (capex) needs in the coming years. Mitigating factors are the weakening of the South African rand and management's aggressive measures to reduce its cash expenses and optimize its investments and asset portfolio." (S&P)
- "Under our base-case scenario, we project that AngloGold's EBITDA will be $1.5 billion in 2013 and about $1.8 billion in 2014. This is half 2012's $3.0 billion in EBITDA, after adding back the $0.3 billion negative impact of the industrial action in South Africa last year." (S&P)
Leverage& Liquidity
- Short term liquidity is adequate. S&P estimates that cash on hand vs. short term debt for the next 24 months stands at 1.2x despite the increased negative free cash flow from operations.
- Cash flow from operations according to S&P projections will stand at $0.7-$0.8 billion over the nine-month period to December 2013, and $1.3-$1.4 billion in 2014.
- Total Debt to EBITDA stands at 1.5 & EBITDA to Interest Expense at 10.1 which are conservative figures and seem healthy but are expected to deteriorate should Gold prices remain under pressure
- Short-term debt of $150 million & $733 million of convertible bonds maturing in May 2014. However, the company has secured a bridge facility for one year, which may refinance and push the maturity to 2015.
- Currently Anglo Gold has sufficient liquidity to service short term debt and maintain Capex according to Moody's and S&P.
Temevo potesse scendere sui 95, ma se tiene i 99 direi che non abbiamo sbagliato ad entrare subito.
