GlobeNewswire

World’s top miners keep performing but investors unimpressed

Share
  • Revenue up 8% to $683 billion
  • EBITDA up 4% to $165 billion
  • Record dividend paid to shareholders of $43 billion, up 13%
  • Market capitalisation of the Top 40 down 18% to $757 billion, 31 Dec 2018 with partial recovery to $849 bn at 30 Apr 2019

LONDON, June 04, 2019 (GLOBE NEWSWIRE) -- The world’s 40 largest mining companies continued to consolidate their stellar performance of the past several years by delivering steady growth in 2018, according to PwC’s Mine 2019 report released today.

As a group, the Top 40 increased revenue by 8%, buoyed by higher commodity price rises, and lifted production by 2%. They also boosted cash flows, paid down debt and provided a record dividend to shareholders of $43 billion.  Forecasts indicate continued steady performance in 2019. Revenue should remain stable, with weaker prices for coal and copper offsetting marginally higher production and higher average prices for iron ore.

Yet investors seemed unimpressed by the Top 40’s result, judging by market valuations, which fell 18% over 2018. While total market capitalization rose in the first term of this year, it remains 8% down compared to the end of 2017.  Over the past 15 years, total shareholders’ return in mining has lagged that of the market as a whole as well as comparable industries such as oil and gas.

PwC’s Global Mining and Metals leader, Jock O’Callaghan, said: “One thing is clear – mining requires more than good financial performance to continue to create and realise value in a sustainable manner.

“We believe that the market has reservations about the mining industry’s ability to respond to the risks and uncertainties of a changing world.

“With strong balance sheets and cash flows, now is the time for the Top 40 to address the issues weighing down market values: climate change, shifting consumer sentiment, and technology adoption.

“Miners need to move swiftly to restore faith in ‘brand mining. As an industry, this means transforming their reputation as efficient ‘converters of dirt’ posing omnipresent environmental risk to prominent builders of both economic and societal capital. Prioritising greener and consumer-centric strategies, enabled by technology, will help earn the trust of stakeholders and enable miners to create sustainable value into the future.”

Balance sheets remain strong; capital expenditure up but slow

In 2018 the Top 40 paid down $15.5 billion in net borrowings, resulting in the gearing position dropping below the 10-year average. All liquidity and solvency ratios improved during the year, leaving the world’s largest miners with strong balance sheets and cash flows.

In line with expectations, capital expenditures started to rise again, albeit from historically low levels.  The 13% increase over the previous year to $57 billion suggests that miners are continuing to proceed cautiously; approximately half (48%) of the capital expenditure in 2018 was for ongoing projects.

Copper and gold dominated spending in 2018, attracting $30 billion worth of investment. Capital expenditure on coal was consistent, year on year, and it is expected that miners will maintain current production levels while the coal price remains high.

Shareholders, government and other stakeholders rewarded

An 11% lift in operating cash flows has allowed the Top 40 to increase shareholder distributions in 2018 to a record $43 billion. Dividend yield for the year was 5.5%. There was a notable jump in share buybacks to $15 billion, up from $4 billion in 2017. Rio Tinto and BHP accounted for 70% of the total activity returning proceeds of non-core disposals to shareholders.

“While their shareholders see buybacks as welcome news in the short term, miners need to ask whether this has come at a cost given the challenges of attracting long-term capital.” said Mr O’Callaghan.  “Equity raisings during the year remained at a paltry $3bn, lower than the preceding two years.”

In 2018 the share of value distributed to governments in the form of direct taxes and royalties increased from 19% to 21%. Employees received 22% of the total value distribution from the Top 40.

M&A activity picks up

After several years of sluggish activity, M&A picked up significantly in 2018. The value of announced transactions rose 137% to $30 billion, driven by a flurry of activity in the gold sector, the on-going push by miners to optimise their portfolios, and momentum to acquire energy metals projects.

“The renewed appetite for large transactions looks set to continue this year, with announced deal value to 30 April already exceeding the whole of 2017,” said Mr O’Callaghan. “Post merger disposal of non-core assets in revised portfolios will support more deals activity in the near term.”

Gold sector consolidating

The gold sector is experiencing a renewed round of consolidation, driven by a shrinking pipeline of projects, fewer new high-grade discoveries and a lack of funding for junior developments. Gold deals increased from 8% of total Top 40 deal value in 2017 to 25% in 2018, and this year are tracking at close to 95% of deals as at the end of April.

“In the current market, gold mining companies need to be rigorous and disciplined with prospective deals. Investors are still reeling from the spate of overpriced deals between 2005 to 2012, the value of which has now been lost,” Mr O’Callaghan said.

Notes to editors:

PwC’s Mine 2019 analysis is based on the major top 40 global mining companies by market capitalization. The results aggregated in this report have been sourced from the latest publicly available information, primarily annual reports and financial reports available to shareholders. The full report can be accessed via the following link: www.pwc.com/mine

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2019 PwC. All rights reserved

Contact David Bowden
  Global Communications Manager | PwC
  m: +44 (0)7483365049
  e: david.bowden@pwc.com 



 

About GlobeNewswire

GlobeNewswire
GlobeNewswire
One Liberty Plaza - 165 Broadway
NY 10006 New York

https://globenewswire.com

GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

Subscribe to releases from GlobeNewswire

Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from GlobeNewswire

Hexagon Composites ASA: Mandatory Notification of Trade5.6.2020 17:11:41 CESTPress release

Dan Krick, SVP Organizational Development has sold 24,896 shares in Hexagon Composites ASA at a price of NOK 36,42 per share. The sale is primarily to finance tax obligations from his exercise of options earlier in the year. After the transaction Dan Krick holds zero shares in Hexagon Composites ASA. This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act. For more information: David Bandele, CFO, Hexagon Composites ASA Telephone: +47 920 91 483 | david.bandele@hexagongroup.com About Hexagon Composites Hexagon delivers safe and innovative solutions for a cleaner energy future. Our solutions enable storage, transportation and conversion to clean energy in a wide range of mobility, industrial and consumer applications.

CONDITIONS FOR RIKSBANK BID PROCEDURES SEK GOVERNMENT BONDS5.6.2020 15:05:00 CESTPress release

Sveriges Riksbank Bid procedure details Government Bonds, 2020-06-12 Maturity dateLoanISIN codeCouponVolume, SEK million2026-11-121059 SE00071259271.00 %1,000 +/- 2502031-05-12 1062 SE00139353190.125 %1,000 +/- 250 Settlement date 2020-06-16 Bids have to be entered by 10.00 on JUN 12, 2020 Highest permitted bid volume: 1 000 SEK million in issue SGB 1059 and 1 000 SEK million in issue SGB 1062 Lowest permitted bid volume: 50 SEK million Bids only through counterparties approved by the Riksbank RESULT OF AUCTION WILL BE PUBLISHED NO LATER THAN 10.10 (CEST) ON JUN 12, 2020. For more information, please contact: Trading desk at the Riksbank + 46 8 696 6970 General and special terms and conditions can be retrieved athttp://www.riksbank.se

Correction: Correction: Correction: AB Klaipedos nafta financial information reporting dates in 20205.6.2020 15:05:00 CESTPress release

Correction: AB Klaipedos nafta social responsibility report for the year 2019 will be released on 9 June 2020. AB Klaipedos nafta (further – KN) informs that it plans to release financial information in 2020 according to the following schedule: DateReporting informationWithin first 5 working days of every month of 2020KN preliminary revenues* for the previous month31 January 2020Interim financial information for the year 20196 April 2020Audited financial statements for the year 201929 April 2020Interim financial information for the 1st quarter of 20209 June 2020Social responsibility report for the year 201931 July 2020Interim financial information for the 6 month of 202030 October 2020Interim financial information for the 3 quarters of 2020 On 28 April 2020, the Company plans to convene an Ordinary General Meeting of Shareholders. * It should be noted that from 2020 the company will be adjusting course of releasing monthly financial information. As range of the services provided to the

Medtronic Resolute Onyx™ DES Receives First and Only One-Month DAPT Indication for High Bleeding Risk Patients in Europe5.6.2020 15:00:10 CESTPress release

DUBLIN, June 05, 2020 (GLOBE NEWSWIRE) -- Medtronic plc (NYSE:MDT), the global leader in medical technology, today announced it has received CE (Conformité Européenne) Mark for a one-month dual antiplatelet therapy (DAPT) indication for high bleeding risk (HBR) patients implanted with the Resolute Onyx™ Drug-Eluting Stent (DES). For HBR patients, whose bleeding risk may be increased by taking longer DAPT regimens (a combination of aspirin and anti-clotting medication), this new, first-of-its-kind indication allows physicians to recommend a shorter, one-month regimen of DAPT, following a percutaneous coronary intervention (PCI) with Resolute Onyx. The approval is the first of its kind globally. Resolute Onyx DES is available for use in the United States, as well as in Europe and other countries that recognize the CE Mark. Resolute Onyx DES is not currently indicated for HBR patients with one-month DAPT in the United States. Data have been submitted to the FDA with the intent of obtainin

Conditions for Riksbank Bid Procedures Sek Covered Bonds5.6.2020 15:00:00 CESTPress release

Conditions for Riksbank Bid Procedures Sek Bonds Sveriges Riksbank Bid procedure details Covered Bonds, 2020-06-11 Maturity dateLoanISIN codeCouponVolume, SEK million2022-04-08 5531 SE00069912461.00 %1,000 +/- 5002021-12-15 574 SE00081034771.50 %1,000 +/- 500 2021-12-151585SE00089925151.50 %1,000 +/- 5002022-06-15191SE00075256541.00 %1,000 +/- 5002021-12-152112SE00104947161.00 %400 +/- 2502021-09-15514SE00065433281.75 %400 +/- 2502022-06-15143SE00085866551.25 %400 +/- 250 Settlement date 2020-06-15 Bids have to be entered by 10.00 on JUN 11 2020 Highest permitted bid volume: 1,000 SEK million in issue 5531 1,000 SEK million in issue 574 1,000 SEK million in issue 1585 1,000 SEK million in issue 191 400 SEK million in issue 2112 400 SEK million in issue 514 400 SEK million in issue 143 Lowest permitted bid volume: 50 SEK million Bids only through counterparties approved by the Riksbank RESULT OF AUCTION WILL BE PUBLISHED NO LATER THAN 10.15 (CEST) ON JUN 11, 2020. For more information,

AB Klaipėdos nafta preliminary revenue for the May 20205.6.2020 15:00:00 CESTPress release

AB Klaipėdos nafta, (further the Company) reviewed operating segments since the beginning of the second quarter of 2020 and presents revenue disclosures accordingly. The following operating segments of the Company are: Oil terminals activity, that includes Klaipėda oil terminal and Subačius oil terminal,Regulated LNG activity in Klaipėda andCommercial LNG activity, that includes small-scale LNG reloading station in Klaipėda and Business development projects. The preliminary sales revenue of the Company’s oil terminals for the May 2020 comprised EUR 3.1 million and is higher by EUR 0.8 million or by 34.8 per cent compared to May of 2019. The preliminary sales revenue is higher due to increase of sales of oil products storage, if compared to the same period of 2019. The preliminary sales revenue of the Company’s oil terminals for the first five months of 2020 comprised EUR 13.7 million, i.e. higher by 6.2 per cent, compared to the same period of 2019. The preliminary sales revenue of the