Amplats warns of 78% drop in H1 earnings
Anglo American is undertaking an operational review of Amplats, which it is expected to conclude later this year
Anglo American Platinum, the world’s top platinum producer, has warned that first-half earnings will drop by as much as 78%, hit by lower sales and prices.
Amplats, a unit of global miner Anglo American, said it expects headline earnings per share for the six months to end-June to total between 270 and 280 cents, from 1,236 cents a year earlier.
Headline earnings are the main profit gauge in South Africa and exclude certain one-off, financial and non-trading items.
The company said sales volumes were hit by the delayed restart of a converter plant after annual maintenance, and prices remained weak.
Higher-than-expected costs relating to labour, diesel and electricity also weighed on earnings, it said.
South Africa's platinum sector is battling the impact of weak demand, soaring costs and a government safety drive that has cut production as operations are suspended for safety violations.
Amplats also said it incurred a loss of 256 million rand ($31,39 million) resulting from revaluation of its investment in Wesizwe Platinum.
It also took a one-time accounting charge of 388 million rand related to a writedown of its Tumela 4 shaft project and a 505 million rand charge from the suspension of its Marikana operations.
Anglo American is undertaking an operational review of Amplats, which it is expected to conclude later this year.
Analysts expect the review to outline the planned closure of some higher cost deep shafts, signal some potential sales or exits from some joint ventures with rivals, and focus its spending.