Amplats declares first special dividend since 2001
The robust platinum group metal (PGM) rand-price environment helped the group to report record numbers, while operational efficiencies saw it shrugging off the impact of Eskom’s load shedding and the three-week unprotected strike at Mototolo mine.
The exceptional PGM fundamentals, led by the 48 percent strengthening in the palladium price in 2019 and the 73 percent rally in the rhodium price, have helped producers to revel in excess cash.
Amplats rewarded shareholders with 368 percent increase in total dividend to R14.2 billion, or R52.60 a share, representing the second biggest dividend since 2006, when it declared a dividend of R53 a share. This was also a demonstration of how the group was an industry leader in terms of shareholder returns, and was in line with its dividend policy.
The group said that, owing to its strong cash generation, it had declared a final dividend of R11.2bn in the second half of 2019, or R41.60 a share, made up of a R16.60 base dividend and a R25 special dividend. “We are paying available cash,” chief financial officer Craig Miller said.
In addition to the dividend, group net cash jumped 497 percent to R17.3bn from R2.9bn in 2018. Headline earnings jumped 145 percent to R18.6bn from R 7.6bn a year earlier.
Amplats said, overall, PGM production was up 1 percent year on year to 4.4 million ounces.
Amplats said Mogalakwena and Unki mines delivered record production, with the turnaround plan at Amandelbult on track.
Amplats, however, lost 38 000 PGM ounces of production last year as a result of load shedding, resulting in a R742.3 million loss in revenue that could never be recovered.
Outgoing chief executive Chris Griffith said the company had made strides in terms of safety.
“For the first time in Anglo American Platinum’s history, we have had no workplace fatalities at our managed operations in the year. The company also demonstrated leading environmental, social and governance performance in 2019,” Griffith said.
Griffith said the company’s record safety demonstrated commitment to creating a safe working environment.
Amplats’ record-low fatalities come as South Africa’s mining industry made significant progress last year, reducing fatalities to 51 from 81 a year earlier.
Seleho Tsatsi, an investment analyst at Anchor Capital, said the special dividend meant there was scope for even higher returns.
“The substantial cash being generated by the company suggests that the scope for increased cash returns to shareholders is high,” said Tsatsi. Amplats shares rose 5.43 percent on the JSE on Monday to close at R1 329.99.