American Anglo to cut its dividend again

American Anglo to cut its dividend again

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Anglo America PLC reportedly is looking ahead to slash its dividend – yet one more depiction of a turmoil rocking in the mining industry during a prolonged slump in commodity prices.

In case, if Anglo America goes off for a dividend cut, it’d be the second one from a large mining company in recent months. Moreover, it might come four months after when Anglo stated to cut off 53,000 jobs – 1/3 of its workforce in the upcoming years.

Anglo might be taking a turn towards a so-called payout-ratio dividend where investors might receive cash relative to earnings. Both proportional to each other; a rise in earnings might raise the dividends – likewise s mutual fall.

Anglo’s Chief Executive Officer, Mark Cutifani, upon a reach to comment, refused to state anything regarding dividend’s prospect, in a conference. However, he said that company is in discourses with its shareholders to come up with a payout issue resolution. Apart from this, he claimed the company’s board to have had sat to discuss the entire scenario – but press would be updated on Tuesday at the company’s investor-day presentation in London.

Dividends were quite pressurized in the mining industry. As per mining company Glencore PLC earlier in September this year, it was likely to suspend its dividend while it moves to cut debt and fend off looming ratings downgrades. In addition to this, analysts have a query regarding BHP Billiton’s ability in maintaining its dividend after a breakage with mine managed by a joint venture that had been a cause of flood generation in Brazil. As for Anglo-Australian mining company, it won’t be having any alternation in its payout meanwhile.

As the company reels from plunging prices for its dug metals and gems, it scrambled to shore up its balance sheet as well. The major cause behind it is a global gut of supplies relied upon China – weakening of the global largest consumer of industrial metals.

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