Northern Platinum posts full-year loss, despite a rise in headline earnings

Northam Platinum has experienced improved production and higher sales volumes, yet still reports a loss.

Along with a rise in headline earnings, Northam Platinum reported a widened full-year loss in its summarised financial results for the year ended 30 June.

On Friday morning, Northam chief executive Paul Dunne presented the group’s progress to the investment community. The results stated that the group’s financials had been weighed down by preference share dividends related to a BEE transaction, which increased the company’s black ownership levels to 30 percent. It announced that its headline loss per share fell to 200.5 cents per share.

Their headline earnings, which are adjusted for the impact of the BEE transaction, grew by 5.8 percent to R421.5 million and their sales revenue rose 10 percent to R7.6 billion. Their headline earning per share was 82.7 cents.

Northam also announced a rise in refined metal production by 4.5 percent, accrediting Zondereinde mine for its commendable operational performance, where production volume rose 7 percent year on year.

The company stated: 

“The year under review has been among the busiest in the company’s history as we have progressed our strategy of growing and diversifying our operations. This has been achieved during a period with significant challenges for South Africa’s PGM mining sector. A period of consolidation will follow in F2019 characterised by project execution, operational delivery and stock reduction. Post the commissioning and ramp up of the Booysendal expansion project, the company is expected to become a strong cash generator, enabling Northam to purchase further Zambezi preference shares. The best defence for Northam in this difficult market remains in our relative position on the cost curve, ensuring that all production is cash generative.”

Key features of the results presentation included: 

  • Normalised headline earnings at R421.5 million
  • Metal production 5.2 percent higher at 549 000oz 6E
  • Record group capital expenditure at R3.8 billion
  • Execution of the growth strategy on track
    • 19 percent increase in resource base to 238Moz
    • New 20MW furnace successfully commissioned
    • Steady progress at Booysendal South
    • 2,000 permanent jobs created
    • Eland acquisition finalised
    • Significant progress in accessing Zondereinde’s Western extension.