• HEPS reduced by 43%
  • Net revenue declined by 20%
  • However, Unki operations remained firmer

Harare- JSE-listed platinum producer, Anglo-American Platinum Limited (Amplats) has reported a 43% decrease in headline earnings per share during the half-year ended 30 June 2022 owing to lower platinum prices during the period and reduced sales. 

Amplats shares have fallen 32% since the start of the year as lower PGM prices took a toll.

Sales volumes declined by 20% as total PGM production went down by 4% while platinum prices were affected as investors anticipated a weak automobile market as inflation surged due to Russian aggression in Ukraine. With the price of most items rising during the period, there were concerns that the red-hot auto market will start cooling down as people focus on staples.

Production succumbed to a cocktail of headwinds including load shedding and global supply chain disruptions.

This resulted in both net revenue and headline earnings per share (HEPS), the main profit measure in South Africa slumping by 20% and 43% respectively. 

Net revenue slipped by 20% to R85.6 billion from R107.5 billion while HEPS fell to R101.4 billion from R176.47 in the comparative period with net cash plummeting by 54% to R81 billion from R175 billion in 2021.  

“The first half of 2022 has seen us largely mitigate the operational headwinds of Covid-19, global supply chain disruptions, managing electricity disruptions, as well as social and geopolitical complexities to deliver another strong financial performance,” Amplats Chief Executive Officer, Natascha Viljoen said in a statement accompanying the half-year financials. 

“This is coming from the period of record results when we experienced record prices and processed and sold the majority of inventory built up during the ACP rebuild in 2020.”

During the period, South Africa experienced recurrent power supply blackouts with the power utility, Eskom resorting to load shedding schedules. 

Above that, the war in Ukraine sparked by Russian aggression in February 2021 disrupted global supply chains affecting productivity. 

However, Zimbabwean Unki Mine operations and Mototolo delivered 21% increases as a result of the successful implementation of concentrator debottlenecking projects which increased concentrator capacity from 180ktpm to 210ktpm.

Amandelbult maintained production, despite mined-out areas leading to infrastructure closures at Tumela at the end of 2021 while Mogalakwena experienced several headwinds including unprecedented rainfall at the start of the year and COVID-19-related supply chain disruptions that led to delays in the delivery of drilling equipment.

The Group maintained its guidance for 2022 unit cost of production at between R14 000 and R15 000 per PGM ounce, based on an oil price of around $100 per barrel. That would represent a year-on-year cost increase of between 9.1% and 16.9%.

Capital expenditure guidance for the full year was cut to between R16 billion and R17.5 billion.

The company declared an interim dividend of 81 rand per share, compared to 175 rand per share last year.

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