AngloGold Ashanti delivered a near fourfold increase in free cash flow in the third quarter of 2020, driving its adjusted net debt to its lowest level in almost a decade and supporting the decision to double its dividend payout ratio.
The company will pay shareholders 20% of its free cash flow before accounting for capital expenditure in growth projects, up from 10% previously.
The company will also double the frequency of payouts from the current annual dividend declaration, to semi-annual payments.
“We’ll continue to enforce capital and cost discipline to deliver strong cash flows in this elevated gold price environment,” said Christine Ramon, AngloGold Ashanti’s Interim CEO.
“Doubling our dividend payout ratio demonstrates confidence in our ability to both improve direct returns to shareholders and to self-fund our growth projects and sustaining capital requirements.”
Free cash flow rose to $339 million for the quarter ended 30 September 2020, a 290% increase from the $87 million generated in the comparable quarter of last year, helped as a result of lower costs from continuing operations, lower capital expenditure and a 30% higher gold price received.
This figure excludes the $200 million of proceeds received for the sale of its South African operating assets on 30 September 2020. Cash inflow from operating activities was up 56% to $551 million from $354 million in the same period last year.