Royal Bafokeng Platinum (RBPlat) yesterday said it expected its earnings to drop by double-digits in a trading statement for the six-month period ended June 30 on the back of lower platinum group metal (PGM) prices.
RBPlat said it was in the process of finalising its financial results. A weaker PGM pricing environment, coupled with lower 4E ounce production and inflationary pressures contributed to a decrease in the mining firm’s earnings.
Basic earnings per share (Eps) and headline earnings per share (Heps) regressed into estimated basic loss per share (estimated LPS) and estimated headline loss per share (estimated HLPS) from the previous corresponding period, it said.
RBPlat said estimated LPS for the period amounts to 117.0 cents, a decrease of 115.3% compared to a basic Eps of 765.4c for the previous corresponding period. Estimated HLPS was 113.8 cents, a decrease of 114.8%, compared to a Heps of 767.3 cents for the previous corresponding period.
RBPlat said this was due to a decline in the PGM prices, “the most significant being the decline in rhodium price we achieved which decreased by 50%, contributing to a 23.6% reduction in the basket price per 4E ounce”.
Contributing to lower forecast earnings was on-mine inflation being higher than consumer price inflation (CPI); and operational challenges at its Styldrift mine.
“The above was partially offset by foreign exchange gains on the revaluation of concentrate following the weakening of the rand against the US dollar,” it said.
Last week Impala Platinum won the takeover bid for RBPlat and its rival Northam sold its 34.5% shareholding in RBPlat on July 20. Northam had pulled out of its proposed buyout of RBPlat in April, citing a collapse in PGMs prices.
The shares yesterday closed 1.56% higher at R128.98
BUSINESS REPORT