Amplats shines for shareholders on record dividend payout ratio
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ANGLO American Platinum's (Amplats's) shareholders will be smiling all the way to the bank after the company said yesterday that its interim dividend was a record 100 percent payout ratio of headline earnings in the half-year ended June 2021.
Amplats declared an interim dividend comprising both a base dividend and special dividend after it shot the lights out with a strong balance sheet, surging metal prices and an improved operational performance during the half-year under review.
The group declared a cash dividend of R46.4 billion, representing R175 a share, comprising a base dividend of R18.6bn or R70 a share, based on the company's dividend policy of 40 percent of headline earnings, plus a special dividend of R27.8bn, or R105 a share.
Chief financial officer Craig Miller said the record payout was on the back of record results and was based on the company's capital allocation framework.
“We have always been clear about the disciplined capital allocation approach – generating the cash, investing in the business, the base dividend of 40 percent and returning that extra cash to shareholders. At half-year we considered that the appropriate return to make,” said Miller.
Amplats recorded exceptional financial results, including a 155 percent increase in net sales revenue to R107.5bn up from R42.2bn a year earlier, mainly driven by robust platinum group metals (PGM) prices, higher production and sales.
The company delivered record earnings before interest, taxation, depreciation and amortisation of R63.3bn, an increase of 385 percent from the first half of 2020.
Amplats's contribution to the fiscus was R16.6bn paid in taxes and royalties during the period under review, up by R14.4bn compared to a year earlier.
In terms of output, refined production excluding tolling, increased by 128 percent to 2.326 million PGM ounces, due to a strong performance from the Anglo Converter Plant Phase A unit following its rebuild and recommissioning in 2020. Total PGM production increased by 28 percent.
The group said its plans for the Mogalakwena operation in Limpopo were on track and feasibility studies for the mine were expected to be completed by the end of the year and decisions on the pathway forward shortly thereafter.
Current key milestones included progressing an underground exploration decline; engagement with communities on resettlements; integrating the bulk ore sorting plant into planning; and current construction of the coarse particle rejection plant.
Amplats rode the wave of strong PGM prices during the year under review as the global economy recovered from the Covid-19 pandemic and higher demand following supply disruptions in Russia.
The group said that the average PGM basket price was $2 884 (R42 790) an ounce, 47 percent higher than a year earlier. Rhodium and palladium set new all-time highs of $30 000 per ounce and $3 000 per ounce respectively, while platinum hit a six-year high above $1 300 per ounce.
Amplats shares closed 7.88 percent higher at R1 846.98 on the JSE yesterday.