Anglo American oper profit jumps 38% but copper production falls

29th Jul 2011 10:11

Miner Anglo American's operating profits surged 38% for the first half of the year but adverse weather conditions in Australia and South Africa, high input costs and lower ore grades resulted in weak copper production that disappointed investors.For the six months ended 30 June, the company reported an operating profit of $6bn, compared with operating profit of $4.4bn, a year-ago period. More specifically, copper delivered an operating profit of $1.4bn, 18% higher than the first half of 2010, boosted by record high copper prices.However, total copper production slipped 8% to 289,100 tonnes and sales volumes fell 12% due to lower production as a result of anticipated lower grades, rain disruption, and the impact of the Patache port closure throughout the first half of the year. The company also said it costs will continue to be impacted by strong producer currencies and increasing prices for key inputs.Goldman Sachs, in its note, said that the top line beat market estimates, while the bottom line missed expectations. The firm added there is a "slight negative read across to Xstrata on the cost pressures." Anglo American raised its interim dividend by 12% to 28 cents per share. The company said the demand for commodities remains healthy driven by the resources intensive growth in the emerging economies, particularly in China and India but warned that the sovereign debt crisis in Europe and the United States and the policy tightening in the major emerging economies could generate short-term volatility. Shares of the miner slipped 1.6% to 2,950p in early trading session in London.AR