(MENAFN- ProactiveInvestors - UK) Anglo American (LON:AAL) blamed a 55% drop in annual earnings on plunging commodity prices and unveiled a shake-up to cut costs.
Anglo said group underlying pre-tax earnings before interest fell to US$2.2bn from US$4.9bn on a 26% decline in revenue to US$23bn. Underlying EBITDA dipped 38% to US$4.8bn.
The group has cut its asset count to 45 from about 65 having completed or announced US$2.1bn of disposals in 2015.
It said it planned to cut a further US$1.9bn this year and to realise US$3bn-US$4bn from disposals resulting in expected net debt of less than US$10bn by the end of the year.
The sales of its nickel niobium and phosphate businesses and Moranbah and Grosvenor metallurgical coal operations are under way.
Anglo said it planned to focus on diamonds platinum group metals and copper with bulk commodities and other minerals to be managed for cash or disposal.
It expects to reduce capital spending year-on-year by a quarter to less than US$3bn in 2016.
Chief executive Mark Cutifani said: "We're taking decisive action to sustainably improve our cash flows and materially reduce net debt while focusing on our most competitive assets."
Meanwhile rating agency Moody's downgraded the senior unsecured ratings of Anglo American and its subsidiaries to (P)Ba3 from (P)Baa3.
Moody's said: "Today's downgrade of AAL's ratings to Ba3 from Baa3 primarily reflects Moody's assessment that the company now faces a higher business risk due to deterioration in commodity market conditions and a longer and more uncertain deleveraging period than previously expected."
At the pre-tax level the miner made a loss of US$5.4bn sharply wider than the losses of US$259mln a year ago.
Anglo American said the falls were partly offset by weaker producer country currencies resulting in an underlying EBIT benefit of US$1.8bn plus cost reductions.
The company saved US$1.3bn in 2015 by cutting unit costs by 16% and increased production volumes by 5%.
It reduced net debt by US$600mln since the half year to US$12.9bn at the end of the calendar year.
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