Anglo American (NGLOY) Expects Production Dip to Cut Costs
Anglo American plc NGLOY announced a potential decrease in production for the next two years due to various constraints and the prevailing unpredictable market conditions. The company is taking these steps to lower its expenses and allocate capital strategically. It aims to achieve more profitable production consistently over time.
Anglo American's output for 2023 increased about 3% year on year. The upside was driven by expanded activities at its Peruvian copper project Quellaveco and stable iron ore production, which offset lower platinum and diamond production. However, the company expects production to fall approximately 4% in 2024, due to reduced output at its Kumba iron ore mines in South Africa.
NGLOY has plans to further cut production by 3% in 2025, before ramping up 4% in 2026.
Anglo American anticipates a cost reduction of $1 billion in 2024. Consequently, the mining company expects to achieve a decreased cost per unit in 2024 and a substantial reduction of $1.8 billion in capital expenditure during 2023-2026.
NGLOY's primary focus remains on ensuring safety, maintaining operational discipline and making prudent capital allocation decisions.
Price Performance
Anglo American’s shares have lost 39% in the past year against the industry’s growth of 9.9%.
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Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Axalta Coating Systems Ltd. AXTA, Universal Stainless & Alloy Products, Inc. USAP and The Andersons Inc. ANDE. While AXTA sports a Zacks Rank #1 (Strong Buy), both USAP and ANDE carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Axalta Coating’s 2023 earnings is pegged at 44 cents per share, and the same moved north 23% in the past 60 days. Its shares have risen 15.7% in a year.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share, which has remained unchanged in the past 60 days. USAP’s shares have rallied 96% in the past year.
The consensus estimate for ANDE's current-year earnings has moved north 3.3% over the past 60 days. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 64.4%. ANDE’s shares have rallied around 32% in a year.
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