Miners From Emerging Markets Outperform Peers From Developed Countries (PwC)
According to the latest mining report (Mine 2014: Realigning expectations) from PricewaterhouseCoopers, emerging market mining companies contributed aggregate net profits of $24 billion in 2013, down from $39 billion in 2012, compared with those from developed economies which reported a $4 billion net loss, down from 2012’s $33 billion net profit.
Developed economy mining companies also paid $21 billion in dividends while emerging market mining companies paid $20 billion at a far superior yield. However:
“Companies from developed economies appear to have collectively fallen into a place where dividends must be paid despite diminished profitability, that they must at least equal last year and that surplus earnings be automatically returned to shareholders. In contrast companies from the developing markets still recognise that dividends are discretionary and must be closely aligned to profitability. At some point, if conditions remain poor, the market will need to be tested and the dividend tap turned off.”
In general though, last year was not a good year for mining companies because of:
- Decade-low profits, down 72%.
- Record $57 billion in impairments, gold worst.
- Costs up, revenues stagnate.
It should also be said that for the first time, the bulk (53%) of PwC’s Top-40 comprises of mining companies from emerging markets – another trend that’s expected to continue.
To read the whole article, Global Mine 2014: Top 40 Bite the Bullet, which summarizes the report, go to the website of PricewaterhouseCoopers Australia. In addition, the actual report (Mine 2014: Realigning expectations) can be downloaded here.
- Asia and Emerging Markets Had the Worst Dividend Growth Rates for 1Q2014 (FE Trustnet)
- South Africa’s Broken Mining Labor Model (BD)
- Private Equity Floods into Southeast Asia (Nikkei Asian Review)
- Emerging Markets Back in Favour Among European Investors (Citywire)
- Iron Ore, Gold Rush Push South Africa’s Miners to 11-Year High (Bloomberg)
- Emerging Market CDS Volume Up 46% in 2014 (EMTA)
- Johnson & Johnson vs Abbott Laboratories in Emerging Markets (TheStreet)
- What Does it Take to be an Emerging Markets Investor? G&M
- Myanmar: A Long Term Growth Story (AFC Asia Frontier Fund)
- South African Gold Mines “Would Not Weather Strike” (BusinessDay)