Anglo American Shares Rise Despite $2.3 Billion De Beers Writedown

Anglo American (LON: AAL) shares gained around 1.3% on Friday morning despite the company reporting a significant $2.3 billion pre-tax impairment related to its De Beers diamond business in its full-year 2025 results.

This write-down contributed to a loss attributable to equity shareholders of $3.7 billion, a 22% increase from the $3.07 billion loss in 2024.

Despite the De Beers setback, Anglo American showcased strength in its continuing operations, particularly Copper and Premium Iron Ore. Underlying EBITDA from continuing operations rose 2% to $6.4 billion, driven by strong production and cost performance. EBITDA margins remained robust at 49% for Copper and 43% for Premium Iron Ore.

The company's strategic focus on portfolio optimisation is progressing, highlighted by the proposed merger with Teck Resources to form Anglo Teck, a move aimed at creating a global critical minerals champion. Anglo American delivered $1.8 billion in run-rate cost savings by the end of 2025, on schedule. Strong cash conversion from continuing operations reached 107%, with further reductions in working capital.

Net debt decreased to $8.6 billion from $10.6 billion in 2024, reflecting proceeds from the sale of the residual Valterra Platinum shareholding. Further deleveraging is expected from planned divestments. The company declared a total cash dividend of $0.2 billion, or $0.23 per share, consistent with its 40% payout policy.

Headline Numbers:

• Revenue: $18.55 billion, up 5% year-over-year.
• Underlying EBITDA (Continuing Operations): $6.42 billion, up 2% year-over-year.
• Net Debt: $8.6 billion, down from $10.6 billion.

Anglo American's CEO, Duncan Wanblad, stated, “2025 was a transformational year… as we progressed our portfolio simplification and set the course for the future of our company by agreeing to merge with Teck.” He also highlighted strong operational and cost performance in Copper and Premium Iron Ore, contributing to improved underlying EBITDA in both businesses.

Driver Breakdown:

• Cost Savings: $1.8 billion run-rate achieved, enhancing profitability.
• Copper & Iron Ore Performance: Strong margins and improved EBITDA offset challenges in other segments.
• Portfolio Optimisation: Strategic divestments and the Teck merger aimed at unlocking shareholder value.

Despite the overall loss, Anglo American maintained its dividend payout ratio, signaling confidence in its future cash flows. The total dividend per share decreased to $0.23 from $0.64 in the previous year, reflecting lower underlying earnings.