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Financial review

Improved operational and financial performance, despite challenges, contributed to a 42% increase in net cash inflow from operating activities and a solid balance sheet at end 2022 (liquidity of approximately $2.5bn in liquidity). This Financial review provides a summary of our statements of income, financial position and cash flows.

The Company remains committed to maintaining a strong balance sheet with an Adjusted net debt to Adjusted EBITDA target ratio not exceeding 1.0 times through the cycle.

Three-year summaries

Summarised group financial results – income statement

			Restated ⁽¹⁾
US dollar millions	2022	2021	2020
Continuing operations
Revenue from product sales	4,501	4,029	4,595
Cost of sales	(3,362)	(2,857)	(2,829)
Loss on non-hedge derivatives and other commodity contracts	(6)	–	(19)
Gross profit	1,133	1,172	1,747
Corporate administration, marketing and related expenses	(79)	(73)	(68)
Exploration and evaluation costs	(205)	(164)	(124)
Impairment, derecognition of assets and profit / (loss) on disposa	(304)	11	(1)
Other (expenses) income	(26)	(136)	(57)
Operating profit	519	810	1,497
Interest income	81	58	27
Dividends received	–	–	2
Foreign exchange and fair value adjustments	(128)	(43)	–
Finance costs and unwinding of obligations	(149)	(116)	(117)
Share of associates and joint ventures’ profit	166	249	278
Profit before taxation	489	958	1,627
Taxation	(173)	(312)	(625)
Profit for the year from continuing operations	316	646	1,002
Discontinued operations
Profit from discontinued operations	–	–	7
Profit for the year	316	646	1,009

Allocated as follows:
Equity shareholders
– Continuing operations	297	622	984
– Discontinued operations	–	–	7
Non-controlling interests
– Continuing operations	19	24	18
	316	646	1,009

Comparative periods have been restated due to the initial application of the amendment to IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use” on 1 January 2022.

Revenue from product sales increased by 12% over 2021 predominantly as a result of higher ounces sold (234koz) partially offset by lower silver revenue and a marginal decline in the gold price received ($1,793/oz in 2022 vs. $1,796/oz in 2021).

Cost of sales increased by 18% largely as a result of higher cash operating costs ($394m) and an increase in amortisation expenses ($156m) commensurate with the higher gold production profile. This was partially alleviated by lower rehabilitation charges ($38m) resultant of the increase in the risk free rate which positively contributed to the rehabilitation change in estimate at majority of the operations. The cash operating cost variance constitutes approximately 80% of the total cost of sales variance, mainly the result of inflationary challenges and pressures on mining contractors, power, labour, fuel, consumable stores and services.

Exploration and evaluation costs increased by $41m from 2021 primarily due to an increase in pre-feasibility studies at North America. This was slightly offset by lower brownfields and greenfields exploration expenditure across most operations.

Impairments of $304m were processed in 2022 at the Córrego do Sítio (CdS) mining complex ($189m), the Cuiabá mining complex ($70m) and the Serra Grande mine ($45m) in Brazil.

Other expenses at $26m reduced by $110m from the $136m in 2021. The reduction in costs year on year is due to higher expenditure incurred in 2021, not recurring in 2022, relating to: care and maintenance expenditure at Obuasi following the voluntary suspension of underground mining operations in May 2021 ($45m), the premium paid on the early bond settlement ($24m), restructuring costs on the implementation of the new Operating Model ($18m) as well as movements relating to tailings and legacy expenditure ($25m).

The taxation expense of $173m in 2022 decreased by 45% ($139m) compared to 2021 The variance is attributable to the impairments in Brazil resulting in a decrease in deferred tax recognised as well as lower current tax on the back of lower earnings and higher inflation at the majority of our
operations.

Summarised group financial results – statement of financial position

		Restated	Restated
US dollar millions	2022	2021 ⁽¹⁾	2020 ⁽¹⁾
Assets
Tangible, right of use and intangible assets	4,471	3,790	3,190
Investments	1,103	1,764	1,839
Inventories	778	730	802
Cash and cash equivalents	1,108	1,154	1,330
Other assets	612	562	544
Total assets	8,072	8,000	7,705

Equity and liabilities
Total equity	4,134	4,094	3,773
Borrowings and lease liabilities	2,169	2,094	2,084
Provisions	705	806	814
Deferred taxation	300	313	246
Other liabilities	764	693	788
Total equity and liabilities	8,072	8,000	7,705

Comparative periods have been restated due to the initial application of the amendment to IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use” on 1 January 2022.

Summarised group financial results – statement of cash flows

			Restated ⁽¹⁾
US dollar millions	2022	2021	2020
Cash flows from operating activities
Cash generated from operations	1,244	1,353	1,866
Dividends received from joint ventures	694	231	148
Net taxation paid	(134)	(316)	(431)
Net cash inflow from operating activities from continuing operations	1,804	1,268	1,583
Net cash inflow from discontinued operations	–	–	109
Net cash inflow from operating activities	1,804	1,268	1,692

Cash flows from investing activities
Capital expenditure	(1,028)	(1,027)	(739)
Net (payments) proceeds from acquisition and disposal of subsidiaries, associates and joint ventures	(517)	2	28
Net (payments) proceeds from disposal and acquisition of investments, associate loans, and acquisition and disposal of tangible assets	(9)	5	215
Interest received	81	58	27
(Increase) decrease in cash restricted for use	(4)	14	(9)
Other	16	8	(8)
Net cash outflow from financing activities from continuing operations	(1,461)	(940)	(486)
Net cash outflows from discontinued operations	–	–	(31)
Cash in subsidiaries sold and transferred to held for sale	–	–	3
Net cash outflow from investing activities	1,461	(940)	(514)

Cash flows from financing activities
Net proceeds (repayments) from borrowings and lease liabilities	–	(61)	(131)
Finance costs and lease finance costs paid	(120)	(155)	(151)
Dividends paid	(203)	(240)	(47)
Net cash outflow from financing activities	(323)	(456)	(329)

Net increase (decrease) in cash and cash equivalents	20	(128)	849
Translation	(68)	(48)	25
Cash and cash equivalents at beginning of year	1,154	1,330	456
Cash and cash equivalents at end of year ⁽²⁾	1,106	1,154	1,330

Restated for IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use”, effective 1 January 2022
Cash and cash equivalents at the end of December 2022 is net of a bank overdraft of $2m.

Tangible, right of use and intangible assets at $4,471m increased by $681m from the $3,790m in 2021. The increase is predominantly attributable to tangible assets additions ($1,028m), the Corvus acquisition of mineral rights ($365m) and Coeur Sterling acquisition ($152m). This was partly offset by amortisation charges stemming from all operations and the collective impact of the Brazil impairments ($304m) on tangible assets, leased assets and intangible assets.

Investments which include investments in associates, joint ventures and other investments, decreased by $661m from $1,764m in 2021 to $1,103m in 2022 primarily due to the net impact of equity earnings and dividends received of the Kibali JV (decrease of $541m) and the reclassification of the Corvus investment to a subsidiary subsequent to AngloGold Ashanti acquiring the remaining 80.5% interest.

Cash and cash equivalents decreased by 4% compared to 2021. The biggest contributors to this variance was the asset acquisitions of Corvus mineral rights ($365m in cash consideration) and Coeur Sterling ($152m cash consideration) as well as dividends paid in 2022 ($203m). This was partly offset by higher dividends received from the Kibali JV which included the successful release of cash lock-up in the DRC ($549m).

Borrowings and lease liabilities rose by 4% ($75m) to $2,169m compared to the 2021 base. The increase is primarily resultant of higher drawdown on available facilities at AngloGold Ashanti Holdings, AngloGold Australia, Geita and Siguiri which was partially offset by repayments towards borrowing facilities.

Inventory increase is attributable to the build- up of ore stockpiles at Cerro Vanguardia, Iduapriem and Geita as well as the higher gold-in-process at CdS following the temporary suspension of tailings operations as recommended by the National Mining Agency.

The increase in trade, other receivables and other assets is primarily due to contractor prepayments at Geita and Obuasi as well as higher export duties and VAT payments in Cerro Vanguardia.

Trade, other payables and provisions increased mainly due to higher trade creditors, contractor accruals and timing of payments for the Obuasi Phase 3 Redevelopment project as well as mining contractor and Beposo Tailing Storage Facility construction costs at Iduapriem.

Movements in working capital:

US dollar millions	2022	2021	2020
(Increase) decrease in inventories	(54)	58	(83)
Increase in trade, other receivables and other assets	(149)	(49)	(163)
Increase in trade, other payables and provisions	66	44	8
	(137)	53	(238)

Free cash flow reconciliation ⁽¹⁾:

			Restated
US dollar millions	2022	2021	2020 ⁽²⁾
Net cash inflow from operating activities	1,804	1,268	1,1692
Capital expenditure	(1,028)	(1,027)	(739)
Net cash from operating activities after capital expenditure	776	241	953
Repayment of lease liabilities	(82)	(63)	(47)
Finance costs accrued and capitalised	(132)	(159)	(188)
Net cash flow after capital expenditure and interest	562	19	718
Other net cash inflow from investing activities	86	101	42
Other	5	–	–
Add backs:
Cash restricted for use	4	(14)	9
Proceeds from disposal of joint venture	–	(2)	(26)
Free cash flow	657	104	743

Includes continuing and discontinued operations for 2020
Restated for IAS 16 “Property, Plant and Equipment – Proceeds before Intended Use”, effective 1 January 2022