Financial review

Three-year summaries

Summarised group financial results – income statement

US dollar million Notes 2021 2020 2019
Continuing operations
Revenue from product sales 1 4,029 4,427 3,525
Cost of sales 2 (2,857) (2,699) (2,626)
(Loss) gain on non-hedge derivatives and other commodity contracts   (19) 5
Gross profit   1,172 1,709 904
Corporate administration, marketing and related expenses   (73) (68) (82)
Exploration and evaluation costs 3 (164) (124) (112)
Impairment, derecognition of assets and profit / loss on disposal 11 (1) (6)
Other expenses 4 (136) (136) (83)
Operating profit   810 1 459 621
Interest income   58 27 14
Dividends received   2
Foreign exchange and fair value adjustments   (43) (12)
Finance costs and unwinding of obligations 5 (116) (177) (172)
Share of associates and joint ventures’ profit   249 278 168
Profit before taxation   958 1,589 619
Taxation 6 (312) (625) (250)
Profit for the year from continuing operations   646 964 369
Discontinued operations        
Profit (loss) from discontinued operations   7 (376)
Profit (loss) for the year   646 971 (7)
Allocated as follows:        
Equity shareholders        
– Continuing operations   622 946 364
– Discontinued operations   7 (376)
Non-controlling interests        
– Continuing operations   24 18 5
    646 971 (7)
  1. 1 Revenue decreased by 9% from 2020 resulting from 257koz less gold sold. The impact of lower gold sold was partially negated by a higher price received of $18/oz ($1,796/oz in 2021 vs. $1,778/ oz in 2020) as well as higher silver and hydrochloric acid revenue.
  2. 2 Cost of sales increased by 6% from 2020 primarily due to a 15% increase in cash operating costs ($279m), partly offset by a 10% decrease in royalties paid ($19m) and a 16% decrease in amortisation ($93m). The increase in cash operating costs reflects the impact of inflationary and other cost pressures, and includes the impacts of the COVID-19 pandemic. Increases were experienced due to higher labour and contractor costs, fuel and power costs, consumable stores, and higher services and other charges, while unfavourable ore stockpile movements and consumable inventory write-offs further contributed to increased costs.
  3. 3 Exploration and evaluation costs increased by $40m (32%) mainly due to pre-feasibility studies in North America ($20m), as well as brownfield exploration ($8m) and greenfield exploration ($4m) undertaken across the portfolio.
  4. 4 Other expenses increased by $79m (139%) to $136m and mainly include care and maintenance activities at Obuasi following the voluntary suspension of underground mining operations in May 2021 ($45m), the premium paid on the early bond settlement ($24m), other indirect taxes ($18m), retrenchment costs incurred following the rollout of the new Operating Model ($18m), government fiscal claims ($7m), cost of old tailings operations ($9m) and legal fees and project costs ($10m).
  5. 5 Finance costs and unwinding of obligations decreased by $61m (34%) mainly as a result of decreases in the discount on long term receivables at Geita ($34m) and interest on bank loans ($19m). In addition, amortisation fees on borrowing facilities in prior years of $17m did not recur.
  6. 6 The taxation expense of $312m in 2021 decreased by 50% ($313m) compared to 2020. The decrease in taxation was mainly due to lower current tax in Ghana, Australia, Argentina and Tanzania (due to lower revenue) and deferred tax assets impaired in 2020 relating to the discontinued South African operations not recurring in 2021.

Summarised group financial results – statement of financial position

US dollar million Notes 2021 2020 2019
Assets
Tangible, right of use and intangible assets 1 3,757 3,157 2,873
Investments 2 1,764 1,839 1,667
Inventories   730 802 725
Cash and cash equivalents 3 1,154 1,330 456
Assets held for sale   601
Other assets   562 544 541
Total assets   7,967 7,672 6,863
Equity and liabilities        
Total equity   4,061 3,740 2,676
Borrowings and lease liabilities 4 2,094 2,084 2,204
Provisions   806 814 797
Deferred taxation   313 246 241
Liabilities held for sale   272
Other liabilities   693 788 673
Total equity and liabilities   7,967 7,672 6,863
  1. 1 Tangible, right of use and intangible assets increased by $600m from 2020 mainly due to project capital expenditure of $311m and sustaining capital expenditure of $717m incurred in 2021. Additions to leased assets was $102m in 2021 (mainly sustaining capital). In addition, $14m of finance cost was capitalised as part of the Obuasi redevelopment project. The increase was partly offset due to a decrease in foreign currency translations of $48m. Amortisation charges amounted to $483m in 2021.
  2. 2 Investments which include investments in associates, joint ventures and other investments, decreased by $75m from $1,839m in 2020 to $1,764m in 2021 largely due to a decrease in the fair value adjustment to PureGold Mining ($91m), partly offset by an increase in the fair value adjustment to Corvus ($21m).
  3. 3 Cash and cash equivalents decreased by $176m from 2020. Cash outflows relate mainly to net taxation paid ($316m), capital expenditure ($1,027m), dividends paid ($240m), finance costs ($120m) and net repayment of borrowings and lease liabilities ($61m). Cash inflows relate to cash generated from operations ($1,353m), dividends from joint ventures ($231m) and interest received ($58m).
  4. 4

    Borrowings and lease liabilities increased by $10m and together with the cash balance, IFRS16 and other adjustments resulted in adjusted net debt of $765m at 31 December 2021, up from $597m at 31 December 2020.

    During 2021, the Company concluded a 7-year $750m bond offering, priced at a record low coupon of 3.375% per annum, with the net proceeds directed at early redemption of the $750m, 5.125% per annum notes due 2022.

    The balance sheet remains robust, with strong liquidity comprising the $1.4bn multi-currency Revolving Credit Facility (RCF) of which $1.367bn was undrawn, the $150m Geita RCF of which $40m is undrawn, the $65m Siguiri RCF of which $30m was undrawn, the South African R150m ($10m) RMB corporate overnight facility which is undrawn, and cash and cash equivalents of approximately $1.15bn at 31 December 2021.

Summarised group financial results – statement of cash flows

US dollar million Notes 2021 2020 2019
Cash flows from operating activities
Cash generated from operations 1 1,353 1,828 1,102
Dividends received from joint ventures 231 148 77
Net taxation paid   (316) (431) (221)
Net cash inflow from operating activities from continuing operations   1,268 1,545 958
Net cash inflow from discontinued operations   109 89
Net cash inflow from operating activities   1,268 1,654 1,047
Cash flows from investing activities        
Capital expenditure 2 (1,027) (701) (703)
Net proceeds (payments) from acquisition and disposal of subsidiaries, associates and joint ventures   2 28 (5)
Net proceeds from disposal and acquisition of investments, associate loans, and acquisition and disposal of tangible assets   5 215 17
Interest received   58 27 14
Increase (decrease) in cash restricted for use   14 (9)
Other   8 (8) (6)
Net cash outflow from financing activities from continuing operations   (940) (448) (683)
Net cash outflows from discontinued operations   (31) (54)
Cash in subsidiaries sold and transferred to held for sale   3 (6)
Net cash outflows from investing activities   (940) (476) (743)
Cash flows from financing activities        
Net (repayments) proceeds from borrowings and lease liabilities   (61) (131) 3
Finance costs and lease finance costs paid   (120) (118) (137)
Dividends paid   (240) (47) (43)
Other   (35) (33)
Net cash outflow from financing activities   (456) (329) (177)
Net (decrease) increase in cash and cash equivalents 3 (128) 849 127
Translation   (48) 25
Cash and cash equivalents at beginning of year   1,330 456 329
Cash and cash equivalents at end of year   1,154 1,330 456
  1. 1 Movements in working capital:
    US dollar million 2021 2020 2019
    Decrease (increase) in inventories 58 (83) (67)
    Increase in trade, other receivables and other assets (49) (163) (138)
    Increase in trade, other payables and provisions 44 8 40
      53 (238) (165)

    Inventory decreased as a result of ore stockpile depletions across the operations as well as a reduction in consumable inventory and goods-in-transit following a build-up to compensate for COVID-19 restrictions in 2020.

    The increase in trade, other receivables and other assets is mainly due to the delay in recovery of reimbursable indirect taxes and duties in Tanzania, Ghana and Argentina.

    Trade, other payables and provisions increased mainly due to an increase in capital accruals at Guinea resulting from the mobilisation of contractors to access ore in Block 2 of the lease property.

  2. 2

    Capital expenditure increased by $326m during 2021 due to the continuing focus on the reinvestment programme.

    This included growth capital expenditure of $311m relating to Obuasi, Siguiri, Geita, Tropicana, Sunrise Dam, Quebradona and Gramalote in 2021, compared to $260m invested in growth projects in 2020 (mainly Obuasi, Tropicana and Quebradona). Sustaining capital expenditure was 61% higher in 2021 at $717m, compared with $445m in 2020, including $137m for the Brazil TSF conversion to meet the requirements of new legislation in Brazil.

  3. 3 Free cash flow reconciliation (1):
    US dollar million 2021 2020 2019
    Net cash inflow from operating activities 1,268 1,654 1,047
    Net cash outflow from investing activities (940) (476) (743)
    Finance costs (110) (138) (143)
    Other borrowing costs (35) (33)
    Repayment of lease liabilities (63) (47) (42)
    Movement in restricted cash (14) 9
    Acquisitions, disposals and other 3 2
    Proceeds from sale of assets (2) (226)
    Cash in subsidiaries disposed and transferred to held for sale (3) 6
    Free cash flow 104 743 127

    (1) Includes continuing and discontinued operations for the comparative periods