Impala profit plunges due to platinum strike

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Impala Platinum1 INDEPENDENT MEDIA File photo: Supplied

Johannesburg - Impala Platinum has no plan to pay dividends this year after profit by the world’s second-biggest producer declined 74 percent following a five-month strike at its biggest operations and lower prices.

Earnings excluding one-time items were 0.86 rand for the year ended June, from 3.29 rand a year earlier, the Johannesburg-based company said today in a statement.

The average of 18 estimates in a Bloomberg survey was for 0.87 rand.

Refined platinum output fell to 1.18 million ounces from 1.58 million ounces, it said.

Impala suspended its final dividend after waiving an interim payout in February for the first time since at least 1990, according to data compiled by Bloomberg.

“A comprehensive strategic planning exercise has been initiated to assess the full impact of low platinum-group-metal prices and the strike consequences on the profitability at Impala,” the company said.

“This is due for completion by December 2014.”

A walkout by more than 70,000 miners at the South African operations of Impala, Lonmin and Anglo American Platinum cost the companies about 24 billion rand of stalled output during the stoppage that ended June 24.

The strike pushed the economy into contraction in the first quarter of the year as mining output plunged.

The country accounts for more than two-thirds of mined platinum production.

Total lost output due to the strike was 312,000 ounces, the company said.

The average spot price for the metal was $1,431.60 (R15,247) an ounce in the fiscal year, down 7.6 percent from the previous year.

“Demand growth, particularly in jewellry and investment, has outpaced supply,” the company said.

“Despite this, abundant above-ground stocks have constrained any upward price movement.” - Bloomberg News

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