Anglo American Platinum’s headline earnings in the first half of the year fell by 71% in line with expectations following the change in guidance disclosed in 2022.
In its 2023 interim results, the world’s biggest platinum producer, said headline earnings were R7.9 billion in the period, down from R26.7bn resulting in headline earnings per share of R29.84 compared with R101.40 a share a year prior.
Despite this, Amplats said its board had approved the declaration of a gross final dividend of R3.2 billion, R12 per share, down from R41 declared for the first half of 2022.
"The dividend pay-out is equal to 40% of headline earnings in line with the company’s dividend policy," it said.
Amplats said the drop in earnings was mainly due to a 29% decrease in the platinum group metals (PGM) dollar basket price, which averaged $1 885 (R33 900) per ounce sold, a fall from $2 671. The materially lower basket price was mainly due to a decline in rhodium and palladium prices, which both hit multi-year lows.
The group's latest guidance is that it would produce 3.6 million to 4 million PGM ounces in its 2023 full financial year, the same range in 2024, and 3.5 million to 3.9 million ounces in 2025.
Amplats CEO Natascha Viljoen, said: “In the first half of 2023, and despite the challenging global macro-economic and operating environment, we have achieved results in line with expectations following the change in guidance, disclosed in 2022".
She said total PGM production from own-managed mines and owned volume from joint operations decreased by 8%, primarily due to expected lower grade at Mogalakwena; infrastructure closures in 2022 at Amandelbult and poor ground conditions at Dishaba; and the ramp-down of Kroondal. The decline was marginally offset by increased production from Mototolo and Unki.
"Refined production was 13% lower, primarily due to the ramp-up of the Polokwane smelter in January following its rebuild; scheduled annual maintenance and asset integrity work at our processing operations; and the impact of Eskom load-curtailment, which resulted in deferred production of 66 400 PGM ounces," she said.
Viljoen said despite lower production and a 29% decrease in the PGM dollar basket price, the group has delivered a robust mining earnings before interest, taxes, depreciation, and amortization (Ebitda) margin of 42% and Ebitda of R13 billion.
The group said it had diversified uses for its metals which included industrial, automotive, technology, battery storage, food preservation, investments and jewellery.
"Additionally, we see many other emerging uses including the development of green hydrogen technology, which is PGM intensive," it said.
Amplats said it was building resilience across its business, to increase its ability to thrive through major disruptions.
"These initiatives are helping us facilitate the successful execution of our strategy," it said.
Looking ahead, the group said it expected platinum to remain in deficit over the next few years, as automotive demand gains from the ongoing substitution of palladium in gasoline catalysts.
Amplats forecast palladium to move into surplus for the opposite reason, though to what extent would depend on what happens to automotive production and the Battery Electric Vehicles share of it.
Rhodium would remain in a small surplus, assuming further disposals from the fibreglass industry. The outlook for automotive PGM demand was the key source of uncertainty, the group said.
By 4pm the share was at 0.52% lower at R897.35 on the JSE yesterday.
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