Amplats profits fell more than 70% as production and prices fell

Amplats profits fell more than 70% as production and prices fell

Nastascha Viljoen, CEO, Anglo American Platinum.

Nastascha Viljoen, CEO, Anglo American Platinum.

  • Anglo American Platinum reported a 71% drop in interim earnings.
  • But the company said the result was in line with expectations.
  • the The Board of Directors approved a dividend of R12 per share, compared to R41 previously
  • For more financial news, go to News24 Business front page.

Anglo American Platinum’s interim profit fell by a staggering 71% for the six months ending in June, falling to R7.9 billion compared to R26.7 billion in the first half of 2022.

The decline in earnings was mainly due to a 29% decline in the dollar basket price of the Platinum Group (PGM), which averaged $885 (R33,900) per ounce sold, down from $2,671. The drop in the price of the basket was mainly due to lower prices for rhodium and palladium, which both reached multi-year lows.

Total PGM production from own managed mines and owned volume from joint operations decreased by 8%, mainly due to expected grade declines at Amplats’ flagship Mogalaquina mine; infrastructure shutdowns in 2022 at Amandelbult and poor land conditions at Dishaba; and Krondel slope. The decline was marginally offset by increased production from the Mototolo and Unki operations.

Refined production decreased by 13%, mainly due to ramping up of the Polokwane smelter in January after it was rebuilt; Scheduled annual maintenance and asset integrity in processing operations; and the impact of Eskom’s load curtailment, delaying production of about 66,400 ounces.

Despite the interim results, Amplats CEO Natasha Viljohn said the company delivered results in line with expectations following the change in guidance, which was disclosed in 2022. This was “despite a challenging global macroeconomic and operating environment,” she said.

The company’s board has agreed to declare a final gross dividend of R3.2 billion or R12 per share – less than the R41 declared for the first half of 2022. In line with the company’s dividend policy, the dividend is equal to 40% of principal earnings.

The miner recorded no fatalities in the first half of the year and reached a record low total frequency rate of recordable cases of 1.58 per million man-hours. This represents a 34% year-over-year improvement and an 85% improvement over 2012.

“Our disciplined capital allocation framework supports our strategy and has demonstrated our ability to maintain a strong balance sheet and deliver stable returns to our shareholders that can be sustained through cycles,” said Viguen, noting that the company still held R24 billion in cash – although this was down from R42 billion in the comparative half.

“We also remain confident in our long-term fundamentals including our diversified portfolio of minerals, resources and processes. The discretion and flexibility of our operations ensures that we can make the right decisions at the right time, thereby continuously strengthening our long-term cost curve position.”

Viljoen will step down as CEO of the company next year. She said an announcement about her successor was imminent.

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