Anglogold Ashanti Reports Q2 2026 Results: Full Earnings Call Transcript

Anglogold Ashanti (NYSE: AU ) released second-quarter financial results and hosted an earnings call on Friday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary Anglogold Ashanti reported strong financial performance in Q2 2026, with EBITDA rising 46% to $2 billion and headline earnings increasing by 58% to $1 billion. The company declared nearly $1 billion in dividends for the first half of 2026, reflecting robust cash flow generation. Despite macroeconomic pressures raising costs, the company's disciplined cost management ensured financial metrics outperformed industry standards. 2 billion, including a net cash position of nearly $1 billion, compared to a net debt position of $311 million a year ago.

The company plans strategic investments in high-return projects within its existing portfolio, particularly in Nevada, aiming for significant production growth by the early 2030s. Operational highlights include strong performance from tier 1 assets, contributing over 70% of production with a 71% cash margin. Management emphasized a focus on disciplined capital allocation, maintaining its dividend policy, and launching a $2 billion share buyback program. Future outlook remains positive with anticipated growth in production and cash flow, supported by ongoing cost containment efforts and high gold prices.

Full Transcript Judith, Operator Good afternoon. Welcome to the Anglogold Ashanti Q2 2026 earnings release. All participants are in a listen-only mode. The question-and-answer session will follow the formal presentation.

If you require operator assistance during the conference, please key in star then zero on your telephone keypad. Please note that this event is being recorded. I will now hand you over to Mr. Stuart Bailey.

Please go ahead. Stuart Bailey Thanks very much, Judith. Good afternoon. Good morning to everyone, depending on where you are, and welcome to our results for the second quarter and the first half of 2026.

Alberto and Gillian will be presenting, but members of the executive team are available for any questions you might have. As always, we have a safe harbor statement at the front of the presentation which has important information regarding forward-looking statements, and we would encourage you to read that. I'll hand over to Alberto. Alberto Thank you, Stuart.

I will start with safety. You will remember from our Q1 presentation that we had a tragic fatality at Obuasi on April 24. We suspended operations for two weeks to undertake a thorough investigation into the incident and we are taking the necessary and important steps to prevent a recurrence. This kind of event validates the effort and resources that we spend every day to improve our safety performance.

We do remain proud of the enormous strides we have made over the past five years. As you can see. Before we go into the quarter, let's take a step back and look at the first half, which really how were we doing after half a year? Production after stripping out the sale of Cerro Grande was more or less stable year on year at around 1 1/2 million ounces.

We had an exemplary cost performance again, managing controllable cost slightly lower in real terms, that is if you strip away inflation, oil price, royalties, exchange rate, which is what we can control, we once more are below that level of controllables. Once again you see strong growth in EBITDA and earnings. Comparisons are not usually nice, but probably we have the best EBITDA growth year on year of all of the large gold companies, comfortably outstripping the rise in the gold price. Along with a more than doubling in cash flows, we made sure that shareholders both see the full benefit and see it right away.

With just under a billion dollars in dividends declared over six months, it's been an extraordinary period by any measure. As we look to Q2, there was a production impact from both Cerro Grande sale and the temporary safety suspension at Obuasi. On the positive side of the ledger, we had standout performances at Tropicana and Cuyaba. Total cash cost to the group were 1,480 per ounce.

Once again, as with the half year, the macro context is critical. As I mentioned before, royalties, fuel, broad inflation, FX basically accounted for all of the increase. While this impact is driving cost inflation across the industry, our underlying operational discipline is firmly intact. And that discipline is why our financial metrics are so strong.

We've ensured that earnings and cash flow grow well ahead of the gold price. EBITDA was up 46% to 2 billion. Headline earnings were 58% better at 1 billion. You can see our cash flows remain robust.

8 billion. As we expected, cash taxes more than doubled year over year to 542 million. This reflects not only our improved profitability, but also the timing of payments across our operating jurisdictions. Importantly, it is a seasonal peak.

As we start reading the analyst reports, I think that that's probably something that needs to be adjusted because, for example, we do expect cash taxes to fall to less than half of that 542 million to about 230 to 250 in each of Q3 and Q4. So that points to an even stronger cash conversion over the remainder of the year. We continue to transform the balance sheet. 2 billion, underpinned by a net cash position of nearly $1 billion.

To put that in perspective, we had a net debt position of 311 million just 12 months ago. This allows us to comfortably invest in our growth pipeline while ensuring our shareholders benefit from strong cash returns. This is an interesting graph and we could make this one since 2021, but right now you're seeing since H1 of 2024. As we look at the broader industry landscape, it's clear that external market-driven factors have fundamentally reshaped cost profiles across the industry.

Every operator is navigating the same intense macroeconomic pressures, persistent inflation, fuel spikes and the impact of higher gold-price-linked royalties. Our approach is not to passively accept them. We are relentlessly focused on executing what we can control. This chart provides important historical context of our cost performance.

The gray bars represent our normalized cost, that is what our total cost would be if we simply accepted market inflation and royalty hikes and nothing else changed. However, through active mitigation strategies implemented across our portfolio, we have managed to partially offset these macro factors. This is reflected in the orange parts which represents the total cash cost we actually reported, proving our ability to consistently outperform these macro-inflated baselines.

Through rigorous operational discipline and our full asset potential program, we have successfully compensated not only for the increase due to these external factors, but also for normal changes in grade and mining further from infrastructure that is inevitable. Ultimately, by decoupling our controllable operating costs from these escalating market headwinds, we ensure that the full benefit of record gold prices flows directly to the bottom line, maximizing free cash flow and driving our sector-leading yields. Our T1 assets are the core growth and cash engine of the group, accounting for over 70% of total production at an exceptional 71% cash margin.

These assets hold approximately 80% of our mineral reserves, underscoring the structural long-term quality of our global portfolio. Our tier 2 assets continue to serve as reliable cash generators, delivering a solid 58% margin with ongoing focus on operational discipline and cost competitiveness. This combined asset structure provides superior cash flow leverage to the higher gold price environment while maintaining the quality foundation needed to keep us firmly on track for full year guidance. The high-quality portfolio we just walked through is not static.

We are fortunate to have an emerging slate of low-risk, capital-efficient and potentially very high-return brownfield and greenfield opportunities. These projects underscore what I've said repeatedly: while we always scan the landscape for value-adding M&A, the best opportunities for us lie within our portfolio. Nevada is anticipated to become a significant production center for the company in the early 2030s. We're advancing to full feasibility study at Arthur, but even at our existing operation we have options with the potential to add between 10% to 15% to our current production profile in the next three years, all from our existing operations.

There are various opportunities identified through leveraging our established strategic asset review and option analysis processes. Key operational focus areas include additional ore sources and processing plant expansions aimed at sustainably improvement on current production bottlenecks at Cuyaba, Gaeta, Siguiri, Obuasi and Sukati. We are currently advancing high-value exploration opportunities, priority studies and project implementations all along the pipeline with a new, more agile fast-track project framework. I will give a detailed update of these growth projects in Q3.

This is what disciplined capital allocation looks like: taking part of our record free cash flow and reinvesting in its low-risk, high-return opportunities that will optimize the value we can deliver from our world-class ore bodies. We are pre-funding the health and expansion of these assets today, ensuring they remain highly profitable cash generators well into the next decade. On dividends, it is worth having a quick reminder of our dividend policy. 5 cents a share.

It also provides for an annual true-up payment bringing the payout to 50% of free cash flow. We again used discretion to make that true-up at the half year, underlining not only the extraordinary cash flow generation, but also our confidence in the outlook of the business. That takes our dividend declaration for the half year to 949 million, with 364 million declared in Q2. This remains one of the most generous yields in the sector.

And, as normal, we expect a strong second half. When you look at our overall capital allocation framework, you will see it working precisely as intended. Our portfolio is well capitalized and is performing consistently to plan. Our balance sheet is the strongest it's ever been.

We're delivering sector-leading returns with one of the industry's most attractive yields. We've shown an investor-forward approach with more frequent dividend payments. In April, we executed a buyback of our outstanding bonds, retiring 666 million of our 28 and 30 notes. That's another reduction in our longer-term financing risk and a clear improvement in our strategic flexibility.

That positions us, willing to deploy excess liquidity into a 2 billion open market share buyback program. Shareholders approved the program last week and we're now waiting approval from the South African Reserve Bank. Again, if you step back, this is a business with a predictable operating base and unrivaled project pipeline and a balance sheet that will stand us in good stead in whatever market we encounter. With that I hand over to Gillian.

Julia Thank you, Alberto. We generated free cash flow of $727 million in Q2, a 36% increase over the 535 million reported in Q2 of last year. 4 billion, driven by disciplined cost execution and a 35% higher average gold price received. The upward pressure on costs for our industry were particularly acute this quarter.

7% 12 months earlier. The primary driver was the 45% increase in Brent crude prices, which led to a spike in our energy inputs. Australia was the clearest example, with inflation more than doubling to 4%, putting pressure on local labour and consumables. US dollar weakness was matched by appreciation of our local currencies, creating strong cost headwinds.

This currency-driven inflation is receiving aggressive focus on internal cost containment measures. Our internal realized inflation rate, which represents CPI changes in the jurisdictions that we operate, is currently just under 6%. We're working to offset those cost pressures with our Full Asset Potential program and by adopting a total cost of ownership supply chain framework, ensuring disciplined capital allocation by optimizing long-term asset performance. In our financials, the results show a significant rise in earnings and free cash flow.

The increase in free cash flow is underpinned by higher realized price and improved cash receipts from Kibali. EBITDA rose 46% to $2 billion. Basic earnings per share rose 49% year-on-year to 197 cents, up from 132 cents in Q2 of last year. 3 billion swing from June in the prior year.

Total cash costs increased by 21% year-on-year to $1,480 per ounce, compared to $1,226 per ounce in Q2 of 2025. We've been very clear on those exogenous factors driving the increase. Inflation, higher gold price—linked royalties and exchange rates collectively added around $216 per ounce, or 18%, to the cost base. The higher gold price meant higher revenue-linked royalty costs, while the 45% increase in oil price drove up our fuel costs across the portfolio.

The suspension at Obuasi accounted for another $38 an ounce. In our managed operations, we saw the benefit of our Full Asset Potential programs, specifically our plant feed expansion program at Cuiaba. Total cash costs for our managed operations increased by 20% to $1,486. Even through Full Asset Potential and other operational improvement initiatives, we continue to look for opportunities to improve efficiencies and protect our margins.

On free cash flow, the higher price added 733 million, offset by low sales volumes which reduced it by 151 million. Increases in operating costs were largely driven by higher royalties, inflationary pressure and the weaker US dollar, partly offset by higher by-product revenues and lower costs related to legacy tailings facilities. It's important to note that earnings-related tax payments in Q2 2026 were the highest on record and are expected to be by some way the highest for this year. Capital spend stepped up as planned, while distributions to our non-controlling interests were £85 million year-on-year.

We are pleased to again reaffirm annual guidance based on our stated assumptions, which underscores the robustness of our portfolio and the improving operational performance into the second half. We do expect a second-half-weighted production profile, particularly in Q4. Production is expected to reduce slightly at Tropicana as open pit mining moves into the lower grade Havana 6 pit, and at Iduapriem due to difficulty accessing temporarily flooded higher grade areas. Obuasi is running at a normalized run rate with half two production expected to be 150,000 ounces.

We are keeping a close eye on developments in the Middle East to mitigate any impacts on our energy and global supply chains. With that, I'll pass back to Alberto to outline our relative market performance. Alberto Thank you, Julia. We've not changed our focus.

2026 is about disciplined execution and controlling what we can control, like we have done in the past five years. In a strong gold environment, discipline matters more, not less. Our aim is simple: protect margins, allocate capital, rigorously strengthen the portfolio. We remain laser-focused on cost discipline across the portfolio for Full Asset Potential.

We are systematically looking for ways to offset external pressures across the board. We're increasing the production contribution from our tier one assets, which structurally lowers our cost base and improves margin resilience. Active portfolio management remains core. We've been active in this area and will continue to direct capital to assets that generate superior risk-adjusted returns.

Sustaining capital is about protecting safety and reliability as well as asset longevity and growth. We are appropriately capitalizing our assets to ensure safe, stable and sustainable operations. We continue to invest in mineral reserve development to increase operational flexibility, particularly in complex ore bodies. Reserve replacement remains fundamental.

Sustained reserve growth underpins long-term value creation. Growth capital is focused on high-quality, long-life projects, particularly in Nevada. These projects enhance jurisdictional quality and portfolio resilience. We are creating flexibility for life extension and brownfield growth across the portfolio by building new tailings and opening land to extend our mining operations.

We are prioritizing short-cycle, high-return organic projects that strengthen free cash flow generation. Operational excellence alone is not enough. Social and regulatory stability are equally critical. We remain deeply committed to our host communities and governments, where we're providing real-time benefit from the higher gold price through taxes, royalty, social investment and meaningful participation in our value chain.

We've made steady progress narrowing the rating gap relative to our North American peers through a comprehensive multi-year plan to strengthen the business. Today, our fundamentals are robust. Our portfolio is performing, and the higher gold price is flowing directly to the bottom line. This slide clearly illustrates our relative outperformance.

The transparent bubbles represent where we and our peers sat exactly one year ago, while the solid bubbles show our position today over the last 12 months.