Mining giant Anglo American posted profits last year as the production and price of metals increased (MUJAHID SAFODIEN)

London (AFP) – Mining giant Anglo American on Thursday posted a 12-percent rise in annual net profits thanks to higher production and the rising price of metals.

Profit after tax increased to $3.5 billion (3.1 billion euros) in 2018 from a year earlier, the company said in an earnings statement.

Anglo runs the De Beers diamond company in addition to mining a number of precious and base metals, including palladium, which on Wednesday hit $1,500 an ounce for the first time.

Prices of Anglo’s mined metals grew by 4.0 percent on average last year, the company said in the statement.

Metals production meanwhile climbed 6.0 percent in 2018, while the group is also benefitting from heavy cost cutting.

“Our commitment to disciplined capital allocation has helped strengthen our balance sheet by more than $10 billion over three years, with net debt reduced to $2.8 billion at the end of 2018,” chief executive Mark Cutifani said in the statement.

“This strong financial result derives from our continued productivity improvements in the underlying operations and better than expected prices for many of our products,” he added.

Group revenue rose 5.0 percent last year to $27.6 billion.

Following publication of the results, Anglo’s share price was down 0.5 percent at £20.11 on London’s benchmark FTSE 100 index, which was 0.6 percent lower overall.

“Underlying profits fell one percent… as higher cash profits were more than offset by increased depreciation of Anglo’s mines,” noted Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“Depreciation may be holding back the bottom line, but Anglo’s full-year results are still ahead of expectations and formidable cash profits mean debt has continued to tumble,” he added.

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