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Monday, 17 July 2023 12:39

Anglo American Platinum expects the huge earnings drop.

By Lehlohonolo Lehana.

Anglo American Platinum warned its interim earnings could fall three quarters after hits from lower metal prices, asset maintenance, as well as SA's electricity disruptions.

Headline earnings and headline earnings per share (HEPS) are likely to decrease by between 65% and 75%. Compared with R26.7-billion in the first half of last year, headline earnings are likely to be between R6.7-billion and R9.4-billion, the company informed the Johannesburg Stock Exchange News Service (SENS) on Monday.

HEPS are expected to decrease to between 2 544c and 3 569c a share compared with 10 140c in the first six months of last year.

Basic earnings per share for the period are likely to decrease by between 65% and 75% compared with the first half of last year, with basic earnings at between R6.6-billion and R9.3-billion, compared with R26.7-billion in the corresponding period of last year.

Compared with 10 125c in the first half of last year, earnings per share are expected at between 2 506c a share and 3 531c a share.

Earnings have decreased for the period largely owing to a decline in revenue as a result of the lower average platinum group metals (PGMs) basket price.

The main contributors to this were declines in the dollar prices of rhodium and palladium. Rhodium was down 47% and palladium 29% lower.

The weakening rand/dollar exchange rate partially mitigated the dollar price impact on the overall rand basket price, which decreased by 15% against the corresponding period last year.

Furthermore, sales volumes from own production, excluding trading, were 12% lower, reflecting lower refined production as a result of the Polokwane smelter needing post-rebuild ramp-up in January.

Also lowering sales volumes from own production were yearly maintenance and asset integrity work at the processing operations, along with the impact of Eskom load-curtailment, which resulted in deferred production of  66 400 oz of PGMs.

Continued inflationary pressure and exchange rate volatility have also led to higher mining and processing costs.

Costs incurred in purchasing of concentrate decreased compared with the first six months of last year owing to lower prices and volumes.

Amplats will release results for the six months ended June 30 on SENS on Monday, July 24.