Anglo American Platinum (Amplats), the world's leading producer of the precious metal, reported a loss during the first half of 2017 due to a stronger local currency, impairments and lower sales, it said in its interim results statement on Monday.
Anglo American Platinum (Amplats), the world's leading producer of the precious metal, reported a loss during the first half of 2017 due to a stronger local currency, impairments and lower sales, it said in its interim results statement on Monday.
CEO Chris Griffith said: "Our mining operational performance has generally been solid in the first half of 2017 and, with the Waterval furnace planned rebuild complete and the converter operating at steady state, we expect to refine the majority of metal in process during the second half of the year. I am particularly pleased that we have been able to further strengthen our balance sheet, despite the weaker rand basket prices in the period. It remains our view that prices are likely to remain subdued in the near term and consequently we will continue to manage the business for this low price environment, whilst positioning ourselves for the future."
The JSE-listed miner reported a loss of R1,19 billion South African rand ($91.95 million) for the six months ended June 30, from a profit of R1,54 billion during the same period in 2016. The sum includes post-tax impairments of R2,21 billion, including about R900 million related to Union mine and equity interests in Bafokeng Rasimone Platinum Mine of about R950 million and Bokoni Platinum Holdings of about R45 million
Griffith added that the disposal processes for the exit from Union, Pandora and the long-dated Amandelbult resources would continue and are expected to be completed in the second half of 2017 "subject to the timing of the relevant Department of Mineral Resources approvals".
Headquartered in Johannesburg with sales offices in Singapore and London, Amplats is a majority-owned unit of globally diversified miner Anglo American. With a workforce of more than 30 000, it deals in Platinum Group Metals (platinum, palladium, rhodium, iridium, ruthenium, osmium)m base metals (copper, nickel, cobalt sulphate, sodium sulphate, chrome) and precious metals (gold). Amplats reported headline earnings, of R747 million for the first half of 2017, down 55% from the same period a year earlier, and net revenue of R27,3 billion for the year, down 11% from the six months ended June 30, 2016.
The poor results meant Amplats would likely not pay a dividend in 2017, stretching its lean run in issuing payouts to investors more than six years. It would need to ensure its cash generation is stable in order to pay consistent dividends, Griffith said, but hoped hoped to issue a dividend in its 2018 financial year.
The company expects platinum production to remain within guidance of 2,35-2,40 million platinum ounces and refined production guidance is between 2,45-2,50 million ounces for 2017. Unit cost guidance remains between R20 350 and R20 850 per platinum ounce, Amplats stated that the decrease in capitalised waste costs at Mogalakwena will add around R400 per ounce to unit costs for 2017.
