AngloGold Ashanti plc (AU) Cash Flow Statement

The OCF/NI ratio has consistently remained above 1.0, reaching as high as 7.24 in 2024Q2 when net income was only $58M, suggesting that reported earnings are backed by actual cash generation. Even in 2023Q4, when net income was negative, operating cash flow was positive at $404M, underscoring the resilience of cash generation. This strong conversion likely reflects the non-cash nature of depreciation and the absence of significant working capital drags, though the 2026Q2 ratio of 1.41 suggests a normalization as earnings catch up with cash flow.

The FCF trajectory shows a dramatic inflection starting in 2025Q1, with FCF margin jumping from 21.5% to 45.6% in 2025Q3, before settling at 29.8% in 2026Q2. This growth is driven by both higher gold prices and disciplined capital expenditure, as CapEx intensity has remained relatively stable around 15-20% of revenue. The 2026Q2 FCF of $926M is more than double the 2024Q4 level, indicating that the company is converting its earnings surge into substantial cash returns, though investors should monitor whether this pace is sustainable given gold price volatility.

The relatively stable CapEx/Revenue ratio suggests a balanced approach between sustaining existing operations and investing in growth projects like Obuasi and Nevada. The absolute CapEx has increased from $240M in 2024Q2 to $485M in 2026Q2, reflecting ongoing expansion, but the ratio has not ballooned, indicating that revenue growth is outpacing capital spending. This efficiency is critical for a gold miner, as it allows FCF to grow without excessive capital outlays, though the company must continue to invest in reserve replacement to maintain long-term production.

The absence of working capital changes in most quarters is unusual and may indicate that the company's operations are cash-neutral in this regard, or that the data is not fully disclosed. However, the $260M outflow in 2024Q4 and $86M outflow in 2024Q2 suggest that working capital can be a source of cash drag during periods of rapid growth. Investors should monitor inventory build-up and receivables, especially as revenue scales, to ensure that cash conversion remains strong.

The company has significantly increased its dividend payout, with 2026Q2 dividends of $823M nearly matching the $926M FCF, leaving little room for other capital deployment. This aggressive dividend policy may signal confidence in sustained cash generation, but it also limits flexibility for acquisitions or debt reduction. Given the low debt-to-equity ratio of 0.25%, the company could afford to maintain or increase dividends, but investors should watch for any signs of strain if gold prices decline.

The cumulative gap between operating cash flow and net income is substantial, with OCF totaling $10.3B versus net income of $5.4B, a difference of $4.9B. This divergence is largely explained by non-cash charges like depreciation and amortization, which totaled over $2.8B in the period, and the absence of significant working capital outflows. This suggests that earnings are of high quality and that the company is generating cash well above reported profits, which is a positive signal for shareholders.