angloplat drops 10%
Anglo Platinum's share price crashed by 10percent following the announcement of the company's dismal performance last year.
In its annual results for the year ended December 2007, Angloplat revealed ailing production figures, ballooning costs and instability in its executive ranks.
The company showed a marginal 6,1percent rise in net profit, which was boosted mostly by the sudden spike in platinum prices.
Angloplat produced 2,4million ounces of platinum last year, down from 2,8million ounces in 2006.
Andrew Joannou, Renaissance Fund Managers director, said: "The market was expecting a disappointing performance [but], this was worse than what we anticipated.
"Costs per unit produced are also going up, but the jump in platinum prices will cover them for the moment," he added.
Angloplat said production would remain at the 2,4million ounces level this year due to Eskom's allowance of only 90percent of previous electricity supply.
Platinum shot up by more than $200 per ounce this month alone on the back of a shortage caused by closures at local mines. Eskom cut the power supply to mines two weeks ago in an effort to save the country's dwindling electricity supply.
The platinum price raced quickly past $1800 per ounce to the current price just under $1920 per ounce.
Norman Mbazima, Angloplat's joint acting chief executive, said, "Our record financial performance was driven by strong demand and record metal prices despite tough operating conditions."
Before the electricity shortages hit, the company was under pressure from the government's safety inspectors over safety measures at its mines, and implemented safety awareness programmes.
In the second half of 2007, following the intervention, there was an improvement in safety performance with the lost-time injury frequency rate at managed operations reducing to 1,71 injuries (per million hours worked) compared to 2,37 in the first half of the year.
But Angloplat recorded 25 fatalities for 2007 compared to 19 in 2006.
Duncan Wanblad, joint acting chief executive, said: "We remain committed to zero harm and we have implemented a major shift in our approach to safety."
The company lost further production as a result of the flooding of its Amandebult operation.
The flooding resulted in a loss in production of 18500 ounces.
Stephen Roelofse, an analyst at Sanlam Investment Management, said: "I don't expect things to get any worse. "