Anglo American Platinum (Amplats), which is continuing with an employee rationalisation exercise to cut costs, yesterday said it was expecting to report lower earnings for the year to June, dragged down by lower platinum group metals (PGM) prices that overshot cost-savings and an uplift in sales volumes.
Amplats operates in South Africa and Zimbabwe where it produces PGM. In the half-year period to end June, the company is expecting to report a dip in interim basic earnings of between 15% and 25% compared to the same period last year.
Headline earnings per share in Amplats for the half year are likely to amount to between R224.20 and R254.60 per share compared to R298.40 per share in the same period a year earlier.
Stocks in Amplats rose 4.41% to R626.92 per share in midday trade on the JSE yesterday.
“Earnings have decreased for the year largely due to a 24% lower realised rand PGM basket price relative to H1 2023. The main contributors to this were declines in the palladium and rhodium US$ prices, which were 34% and 49% lower respectively,” Amplats said yesterday.
However, the impact of the decrease in revenue as a result of lower prices had been partially offset by a 9% increase in PGM sales volumes compared to the prior period. This was due to an uptick in refined production and a draw down in finished goods.
Furthermore, said the company, cost-savings in the first half of the year in line with its cost-out programme had also helped avoid drastic losses.
The company is continuing with plans to cut its employee numbers after it announced early this year that it could retrench as many as 3 700 employees across its SA operations.
“The productivity and operational excellence initiatives (including the employee restructuring process) announced in February are well advanced and further details will be provided at our upcoming 2024 June quarter,” Amplats said.
The company is to report its interim financials on Monday.
On the positive, it experienced “no Eskom load curtailment” during the quarter to end June, a period under which it raised refined PGM output from owned production, excluding tolling by 7% to 1.153 million ounces.
This had been driven by “the release of a work-in-progress inventory” compared to the same period last year. In spite of this, the company’s toll refined PGM production decreased by 5% to 132 900 PGM ounces during the quarter.
“We had an improved performance in the second quarter and we continue to make good progress in the reconfiguration of our business,” said Craig Miller, CEO of Amplats.
PGM sales volumes for the quarter firmed up by 14% to 1.266 million ounces, supported by higher refined production and a draw-down of finished goods.
During the quarter to June, Anglo Platinum realised average PGM basket prices of about $1 419 (R25 820) per ounce. This was 18% down on the same quarter last year, predominantly due to a 37% lower rhodium price and 31% lower palladium price.
PGM production from the Amandelbult mine increased by 7% to 157 600 ounces, driven by higher throughput from underground infrastructures and improved grades resulting from operational efficiencies.
This was, however, partially offset by metallurgical challenges at the plant.
The mine also recorded two fatalities during the quarter. Following the two fatalities, Amandelbult had imposed stoppages across the mine and it is anticipated that the stoppages will have a 5% impact on the mine’s 2024 production.
BUSINESS REPORT