Anglo American’s share price climbs as boss Mark Cutifani claims turnaround is making “solid progress” – but will it be enough to stop a shareholder revolt?
Anglo American boss Mark Cutifani has sought to assure shareholders that the firm is making progress with its turnaround plan – but will it be enough to convince shareholders that he deserves his multi-million pound pay packet?
The troubled miner this morning revealed a 10 per cent drop in diamond production to 6.9m carats for the three months to 31 March, "reflecting the decision to reduce production in response to trading conditions in 2015". It has also cut iron ore production from Kumba by 27 per cnet to 8.9m tonnes, as Sishen is "transitioned to a lower cost pit configuration", although iron ore production from Minas-Rio increased by 3.3m tonnes.
Platinum production, meanwhile, grew four per cent to 567,000 ounces, while refined production of the metal fell 52 per cent because of a planned stocktake and safety stoppage of 12 days at the precious metals refinery.
Copper production was in line with the first quarter of 2015, but overall production decreased 15 per cent after AA Norte assets were sold last September. Nikkel production increased 67 per cent to 11,200 tonnes.
Anglo American's share price rose 1.4 per cent in early trading.
The update comes as Anglo American gears up for today's AGM, where it is thought chief executive Cutifani could face a shareholder revolt over his £3.4m pay packet.
BP shareholders voted against boss Bob Dudley's £14m pay deal earlier this month after the oil major posted an annual loss.
Anglo American has hardly been a stellar performer in the last year. The miner's balance sheet has been hammered by the commodities rout over the last 18 months. This has forced it to scrap its dividend, and unveil an ambitious turnaround plan.
But Cutifani put a brave face on the details this morning.
He said: "The Q1 2016 operating results are in line with the equivalent period of 2015 on a copper equivalent basis and reflect the major restructuring programme under way and our ongoing efficiency and cost reduction strategy. They also demonstrate the market discipline we continue to show in our key markets, particularly diamonds and platinum, and are consistent with our restructuring plans as we focus on lower cost and higher margin assets.
"We are encouraged that the actions we have taken in diamonds are continuing to have a positive effect, while operational productivity continues on an upward trajectory. As a consequence of our solid progress, our production guidance for 2016 remains unchanged."