Amplats flags healthy annual earnings on PGM bonanza
JOHANNESBURG - ANGLO American Platinum (Amplats) expects annual earnings to soar up to 69 percent for the year ended December 2020 as it cashes-in on the record platinum group metals (PGM) price environment.
Amplats said yesterday that headline earnings and headline earnings per share would increase by between 49 and 69 percent to between R27.8 billion and R31.4bn in the year ended December 2020 from R18.6bn in 2019.
Amplats, which is 80 percent owned by Anglo American plc, said headline earnings per share would increase to between R105.86 and R119.57 per share from R70.87 in 2019.
“The expected increase in headline earnings and basic earnings is primarily driven by a 71 percent increase in the rand basket price and partially offset by the impact of Covid-19 on M&C (mined and purchase of concentrate) production, as well as the temporary closure of the Anglo Converter Plant (ACP) during the year, which resulted in lower refined production and sales from own production,” said Amplats.
However, Amplats suffered a major operational setback when the ACP where it refines its metal was rocked by an explosion earlier last year.
“The ACP Phase A rebuild was completed on November 24, 2020, and has been operating well and in line with expectations,” said the group. Amplats said basic earnings and earnings per share for the period were likely to increase by between 50 and 70 percent compared to the prior period.
The robust PGM price environment has been a major tailwind for producers, including Amplats, in 2020. Rhodium, the precious metal that removes fumes from petrol car exhausts, reached a record $2 000 (about R29 651) an ounce last month as China 6 emissions standards set in.
Last month Amplats told investors that output from its own managed mines would be 15 percent lower in 2020 to 2.5 million ounces compared with 3.01 million a year earlier.
It said output during the fourth quarter of 2020 had fallen by 9 percent to 716 900 ounces, with the Mogalakwena Mine producing 3 percent less metal, while production at the Amandelbult Mine was down 22 percent as the Tumela Upper section and surface production come to the end of their life.
Amplats said during the fourth quarter production from Unki in Zimbabwe and Mototolo in Limpopo had increased by 7 and 4 percent respectively, while output from joint ventures were 14 percent lower due to strike action and safety-related stoppages.
Amplats shares closed 4.25 percent higher at R1 641.49 on the JSE yesterday.