the times | Friday July 31 2020 2GM 41
Business
veloper, in a £405 million deal. Mr Cuti-
fani, 62, delivered an upbeat verdict on
the purchase, saying he was “absolutely
thrilled” with what had been found at
the Woodsmith polyhalite mine.
He said there was an initial week and
a half delay as lockdown was imposed
until distancing measures were intro-
duced to reassure staff.
The project involves a 23-mile tunnel
from the mine in the North York Moors
national park to a processing site on
Teesside. Mr Cutifani said about five
miles had now been completed and
tunnelling was still going faster than
originally planned, even though it was
below pre-Covid levels.
Anglo was also forced to increase the
estimated cost for completing its Quell-
aveco copper project in Peru, its biggest
new project in more than a decade,
after work was halted for three months
because of Covid. The project was origi-
nally slated to cost between $5 and $5.3
billion but Anglo said it had now risen
to between $5.3 and $5.5 billion owing
to “additional costs associated with the
demobilisation and subsequent remo-
bilisation of the construction work-
force”. It said that first production was
still expected in 2022.Anglo American’s
double blow from
diamonds and coal
Anglo American has reported a sharp
drop in first-half profits after produc-
tion was hit by lockdowns due to the
pandemic.
The mining giant said that output
was down by 11 per cent, having fallen
by as much as 40 per cent in April.
As well as coronavirus disruption it
was affected by a safety shutdown at a
platinum processing plant in South
Africa and two accidents at coking coal
mines in Australia, one of which left five
people seriously injured.
Lower production was the biggest
driver behind a 39 per cent fall in under-
lying ebitda to $3.4 billion, though the
miner was also affected by lower prices
and some cost inflation.
Underlying net earnings more than
halved to $886 million, though this was
better than expected. Anglo pays a
dividend of 40 per cent of its underlying
earnings so its payout fell accordingly,
to 28 cents per share, from 62 cents per
share a year earlier.
Anglo American is listed in London
and Johannesburg and employs about
95,000 people. It is one of the world’s
biggest mining groups, producing a
range of commodities including iron
ore, coal, copper and diamonds.
Mark Cutifani, chief executive, said
that by the end of June its operations
were back to about 90 per cent of
capacity.
First-half profits were hardest hit in
Anglo’s diamonds business, De Beers,
and its coal operations. De Beers’ un-
derlying ebitda plunged to just $2 mil-
lion from $518 million in the same
period a year earlier, as the pandemic
led to a collapse in jewellery sales and
disrupted mines and the supply chain.
However, after “virtually no sales” in
China in the first quarter, sales were
materially higher in May and June than
in the same months of 2019. “We guess
that China is more in a V recovery,” Mr
Cutifani said.
Coal underlying ebitda fell to
$23 million from $996 million due to
lower prices as well as lower output and
higher costs driven by the incidents in
Australia.
Just before the pandemic hit, Anglo
American took over Sirius Minerals,
the North Yorkshire fertiliser mine de-Emily Gosden Silver slides back
Silver prices fell more than 4 per
cent yesterday on another volatile
day of trading of precious metals.
Gold also fell, retreating slightly
after hitting all-time highs earlier
this week (Emily Gosden writes).
Analysts say silver prices have
loosely been following gold, which
has been driven to close to $2,000
an ounce as a “safe haven”
investment during the pandemic.
Gold outperformed silver in the
initial stages of the crisis but silver
has posted stronger gains recently
and has risen more than 50 per cent
in the past three months, compared
with a 12 per cent rise in gold.
Xiao Fu, an analyst at Bank of
China International, said that for
gold the $2,000 mark was a “very
strong psychological resistance
level and people are a bit nervous
about gold’s valuation”.JEFF J MITCHELL/GETTY IMAGESdecline reducing from 32.4 per cent
in April to 21.4 per cent in May and
only 0.7 per cent in June.
Total revenues in the second
quarter declined by 17.7 per cent to
$10.3 billion, with volumes down
17.1 per cent. Its global brands,
Budweiser, Stella and Corona, fell by
16.6 per cent. Underlying second-
quarter earnings for the group fell
by 34.1 per cent to $3.4 billion. It
took a one-off hit of $2.5 billion
against the value of its South
African business, partially offset by a
$1.9 billion gain from the sale of its
Australian operations.
The shares, listed on Euronext
Brussels, rose by €0.66, or 1.4 per
cent, to €48.45.that its British business had gained
sufficient market share in the
second quarter to become the
biggest brewer by volume in the first
half of this year.
The figures from Nielsen and
CGA suggest its UK business,
Budweiser Brewing Group,
accounted for 24.8 per cent of the
total volume of beer produced here.
Stella and Budweiser claimed the
top two spots in the league table of
the most valuable beer brands in the
retail trade in the second quarter.
Jokes suggesting that sales of its
Corona brand had been hit by its
nominal association with the
coronavirus pandemic proved wide
of the mark, as the lager wasdeemed the most valuable brand in
the world beer category in British
grocers.
Despite the increase in drinking at
home while pubs were closed during
the lockdown, Paula Lindenberg, 44,
president of Budweiser Brewing
Group, said that many people had
continued to moderate their
drinking and the group’s no and low-
alcohol beers had grown in value
and volume. It had also expanded its
portfolio by launching Budweiser
Zero and Stella Artois Alcohol-Free.
For the AB Inbev group, the
second quarter was tough, with
trading being “materially impacted
by the Covid-19 pandemic”. Yet it
reported progress, with the volumeSanitiser gives Rentokil a helping hand
Increased demand for hygiene prod-
ucts from reopening workplaces and
disinfectant services for those sites in-
fected by the coronavirus has stemmed
a decline in trading at Rentokil.
The pandemic has disrupted trading
at the FTSE 100 hygiene and pest con-
trol group as businesses and schools
were forced to close during the height
of the lockdown.
However, a shortfall in providing
weekly washroom services to sectors
such as leisure and hospitality has been
more than offset by strong global de-
mand for hand sanitisers, deep clean
services, and disinfection risk assess-
ment surveys for those companies that
have reopened.
Andy Ransom, Rentokil’s chief exec-
utive, said the hygiene business “has
moved from being considered a low in-
terest, but nonetheless required ser-
vice, to arguably one of the world’s mostimportant business categories”, adding
that the demand has led Rentokil to ex-
pand its hygiene business into new
countries and to launch extra services.
Rentokil operates in 81 countries,
with about 90 per cent of its revenues
generated outside the UK. It wasfounded in 1903 as a towels business
and its expansion has been accelerated
by bolt-on acquisitions.
Revenue fell 0.1 per cent to £1.29 bil-
lion in the six months to the end of June
as its core pest control business de-
clined by 5.9 per cent during the second
quarter and its smaller hygiene busi-
ness rose by 16.3 per cent. Pre-tax
profits fell 45.2 per cent to £61.8 million,weakened also by a £23 million increase
in bad debt provision and the £8.8 mil-
lion cost of personal protective equip-
ment for employees providing
disinfection services.
Rentokil has been retraining 7,000 of
its workers to perform disinfection and
deep-clean services and said yesterday
that 178 workers had tested positive for
Covid-19 as of the end of June.
Rentokil responded to the profit
pressures by making cost savings of
£87 million during the half, including
salary reductions across senior man-
agement and the cancellation of first-
half bonus schemes. It also withdrew
the interim dividend and suspended
mergers and acquisitions.
The savings and trading left it “highly
cash generative” and its strong balance
sheet means it plans to steadily increase
capital expenditure and resume M&A,
it said. The shares, which had slumped
to a low of 340p in March, were up 9¼p,
or 1.7 per cent, at 557½p.Alex Ralph
£61.8m
Pre-tax profit, down by 45.2 per cent
Source: Rentokilhalf, the steepest decline of any region.
Group like-for-like rental income fell
by 14.2 per cent to €1.1 billion.
The landlord expects there to be “sig-
nificantly less” retail space in the UK in
future, while what remains will “need to
have a clear purpose”. It is planning to
convert a House of Fraser department
store at its Shepherds Bush centre into
offices to try to boost footfall.
Unibail is in discussions to sell €1 bil-
lion of property as it seeks to reduce its
41.5 per cent debt-to asset ratio, which
was up from 38.6 per cent at the end of
last year. However, it said it had “ample
headroom” for further property valua-
tion falls before it breached any of its
debt covenants. It had cash and un-
drawn credit lines of €12.7 billion, up
from €11.7 billion at the end of April.
It said it could not reinstate financial
guidance due to Covid-19 uncertainty.Westfield owner’s UK rents
plunge due to shop closures
The owner of Westfield has reported a
sharp decline in the value of its British
shopping centres after a slump in rental
income.
Unibail-Rodamco-Westfield, which
operates two large shopping malls in
Shepherds Bush, west London, and
Stratford, east London, said €640.3 mil-
lion (£577.8 million), or 14 per cent, was
wiped off the value of its UK assets in
the first half of the year.
Unibail has 90 centres in 12 coun-
tries. It said the retail and hospitality
sectors in the UK had been worst hit
after government-enforced store clo-
sures, which stopped retail trading for
much of the second quarter.
Like-for-like net rental income at its
UK centres fell by 34.1 per cent to
€50 million (£45.2 million) in the firstLouisa Clarence-Smith
Budweiser and Corona brands, reported a strong recovery since the start of lockdown and will benefit from pubs reopening