Anglo American Platinum (Amplats) yesterday declared a gross interim dividend of R21.5 billion despite its interim earnings nearly halving due to operational headwinds and social, geopolitical complexities.
This is coming from the prior period of record results.
The share in intraday trade was 1.85 percent lower at R1 188.56, with the share down 29.26 percent in the past year.
In the six months ended in June, headline earnings slid to R26.7bn, 43 percent lower, compared with R46.4bn in the first half of the 2021 financial year.
Amplats chief executive Natascha Viljoen said: “The first half of 2022 has seen us largely mitigate the operational headwinds of Covid-19, global supply chain disruptions, managing electricity disruptions, as well as social and geopolitical complexities to deliver another strong financial performance.
"This is coming from the prior period of record results when we experienced record prices and processed and sold the majority of inventory built up during the ACP rebuild in 2020. Our performance in the first half of this year represents more normalised levels of sales volumes and resulting earnings before interest, taxes, depreciation, and amortization (Ebitda).
Net revenue was 20 percent lower at R85.6bn, while net cash decreased from R175bn to R81bn.
Amplats said the decrease in revenue and earnings were due to lower sales volumes compared to the prior period, which had benefited from the increased refined production due to higher-than-normal work-in-progress inventory following the Anglo Converter Plant (ACP) Phase A rebuild.
Amplats said while the platinum group metal (PGM) basket prices decreased in the first half, the realised price of $2 671 (R44 910) was the second-highest average price on record, illustrating the robust underlying market fundamentals for the suite of metals.
Total PGM production was down 4 percent, with the majority of own-mine assets performing better than in first half of 2021.
“Mototolo and Unki delivered 21 percent increases as a result of the successful implementation of concentrator de-bottle-necking projects. Amandelbult maintained production, despite mined-out areas leading to infrastructure closures at Tumela at the end of 2021,” she said.
Mogalakwena experienced several headwinds – unprecedented rainfall at the start of the year, and Covid-19-related supply chain disruptions that led to delays in the delivery of drilling equipment.
Looking forward for the remainder of the year, Viljoen said inflationary pressures would continue to impact the mining inputs, as well as tightening monetary policy.
Full-year metal-in-concentrate production was expected at between 3.9 to 4.3 million PGM ounces, and refined production at between 4 and 4.4 million ounces.
“Anglo American Platinum is confident that full-year guidance will be achieved; however, potential external headwinds exist, including further Covid-19-related disruptions and Eskom load-shedding,” she said.
In the PGM markets, the forecast was for platinum’s surplus to gradually move towards a deficit due to a significant increase in automotive platinum demand, as some platinum replaces palladium in gasoline catalysts, she said.
“Palladium is likely to move into surplus for the opposite reason, though to what extent will depend on what happens to automotive production. Rhodium should head back into deficit after two years of surplus,” Viljoen said.
On green hydrogen, Viljoen said: “We are excited with the momentum we are seeing in the development of the hydrogen economy and our options to grow and deliver into a transitionary and future decarbonised world.”
Anchor Capital investment analyst Seleho Tsatsi said in a note yesterday: “Despite a significant pull-back in the share prices of the local platinum miners, we remain cautious and would not be buyers of shares in this sector at the moment. The spot prices for the three main metals (platinum, palladium, and rhodium) are 20 percent lower in US dollar terms and 10 percent lower in rand terms than their averages for the first half of this year.“
BUSINESS REPORT