Northam Platinum profit surges 74% on metals prices
Miner Northam Platinum on Friday reported a surge in mid-year profit driven by higher metals prices and said it would accelerate its capital expenditure in the second half.
High prices for metals including platinum, palladium and rhodium helped boost PGM (platinum group metals) miners' earnings and weather the impact of the coronavirus crisis.
The platinum producer reported a 74% jump in normalised headline earnings per shares for the six months ended Dec. 31 of 641.5 cents, up from 369.6 cents a year earlier.
Northam said the dollar basket price of the main minerals it mines surged by nearly 50%, while a weaker local currency reduced production costs.
Production rose 15% to 352,741 ounces, while sales volumes slipped 4.4% to 315,320 ounces due to pandemic-related disruptions.
Northam said lower metal volumes were sent to its refinery in Germany due to a decrease in output and logistical hurdles in the fourth quarter.
The company said it had reinstated all of the capital projects it had temporarily suspended due to the pandemic and planned to accelerate capex in the second half of the year with a 2021 forecast of R3bln.
Capital expenditure during the reported period fell to 1.3 billion rand from 1.4 billion a year earlier.
"The group's strong financial position, prudent financial controls and the successful execution of our expansion strategy will position Northam favourably in continuing to take advantage of improved market conditions," the miner said.
Northam did not declare a dividend, upholding its strategy of acquiring preference shares in its Zambezi Platinum unit as an alternative way to return value to shareholders.
The company now holds 87.5% of Zambezi's preference shares.
Shares in Northam were down 2.29%, lagging a 1.78% fall in the sector by 0705 GMT.