AngloGold Ashanti up over 6% after strong set of Q3 results

The Johannesburg-based company said Wednesday profit attributable to equity shareholders totalled $1 million in the quarter ended Sept. 30, down from $168 million in the same period last year.

The figure is quite an improvement from the loss reported in the second quarter of the year, when AngloGold wrote down almost $2.2 billion worth of its assets due to weak gold prices.

The market reacted to the news, with shares in the company up 6.3% to $15.55 this morning in New York (9:34 am ET).

AngloGold, with 21 operations in 10 countries, has been cutting jobs, spending and exploration and slowing production at higher-cost mines, in order to adjust to a gold price down 22% this year and higher operating costs.

As a consequence, the miner said it is in the process of exiting a number of exploration projects in 13 “non-core” countries, adding that cost-cutting would continue, with hundreds of jobs cuts planed at its Obuasi mine in Ghana and plans to sell operations in Namibia.

In September, AngloGold said it had started cheaper output from operations in Democratic Republic of Congo and Australia earlier than planned. In the same month, it settled wage increases that ended a 48-hour strike in South Africa, where it produced 33% of its gold in the second quarter.

“We’ve delivered a decisive response to the lower gold price with all operating regions showing better production and we’ve seen cost improvements at every level,” chief executive Srinivasan Venkatakrishnan said in a statement.

While the firm expects to achieve at least $500 million in savings by the end of the year, it acknowledged the longer-term picture remains grim.  The company has produced less in the first nine months of the year than it did in the same period in 2012 and with bullion prices continuing to fall, more pressure on AngloGold’s bottom line looks likely.