AU AngloGold Ashanti Ltd

By Alex MacDonald

LONDON--AngloGold Ashanti Ltd. (ANG.JO) said Friday it expects to swing to a net profit in the first half of the year, compared with a year earlier, due to higher gold prices, cost controls and interest savings as a well as benefits from weaker local currencies that have lowered its operating costs on a U.S. dollar-denominated basis.

The company said in a trading update that it expects to report on Aug. 15 a swing in net profit to between $45 million and $59 million for the six months ended June 30, 2016, compared with a net loss of $143 million in the corresponding period a year earlier.

Headline earnings, which strips out exceptional items, are forecast to swing to between $87 million and $99 million in the first half of the year, compared with a loss of $128 million a year earlier.

AngloGold Ashanti issued the trading update in line with Johannesburg share-listing rules which require companies to warn shareholders of any movement in net earnings by more than 20% in either direction.

The South-Africa based gold miner said net earnings will benefit from a higher gold price, which rose 1.5% on year to $1,222 an ounce in the first half of the year, and weaker operating currencies in South Africa, Brazil, Australia, and Argentina.

It has also benefited from continuing to control costs across its portfolio of 17 operations in nine countries and has saved $33 million during the period by making an offer to buy back $779 million in bonds maturing in 2020.

AngloGold also received a boost from the positive translation of a $57 million deferred tax balance in South America.

The combination of these factors helped offset a 7.1% annual decline in gold output to 1.75 million ounces in the first half of the year and $39 million in reduced income from associates and joint ventures during the period.

Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

July 22, 2016 03:48 ET (07:48 GMT)

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