Johannesburg - Anglo Platinum (AngloPlat), the world's largest platinum producer, on Monday reported a 95% fall in headline earnings to R405m for the six months to end June 2009.
Diluted headline earnings per share came in at 169 cents for the first half of 2009 compared to 3 548 cents a share in the first half of 2008.
Headline earnings exclude profits of R2.3bn realised on the conclusion of Anglo Platinum's black economic empowerment transactions with Anooraq Resources Corporation and Mvelaphanda Resources.
Basic earnings per share, which include the profits on the transactions, amounted to 1 144 cents, down 68% from the 3 547 cents reported for the first half of 2008.
The company attributed the lower earnings to a 51% fall in the dollar price realised on the basket of metals sold, offset by higher sales volumes, proceeds received from the Amandelbult business interruption insurance claim of R488m and the Rand weakening by 18% against the dollar over the period.
Refined platinum production at 1 056 400 ounces for the first half of 2009 shows a 6% improvement when compared to the same period in 2008.
Equivalent refined platinum production, or the mined ounces expressed as refined
Ounces, from the mines managed by Anglo Platinum and its joint venture partners for the first half of 2009 was 1.244 million ounces, an increase of 10.3% compared to the first half of 2008.
Refined platinum sales for the six months amounted to 1.22 million ounces compared to 1.11 million ounces in the same period last year.
AngloPlat said its target of 2.4 million ounces of refined platinum production for the full year remains in place.
Turning to the market, the company said it expected the platinum price to move above current levels during the second half of the year due to continuing jewellery and investment interest and a probable positive volume adjustment in vehicle production.
As an increase in price could temper the rate of increase in jewellery and investment demand, the company said it expected the market to remain balanced during the second half of 2009.
"Given a continuation of robust platinum jewellery sales in China, firm platinum investment demand and a probable increase in demand for platinum from the autocatalyst sector, Anglo Platinum believes that the platinum price should find support above $1 200 per ounce during the remainder of the year, and although the current strength of the rand, which is depressing the rand revenue basket at present, is of concern, the expectation is that the rand should trade weaker towards year-end," said AngloPlat CEO Neville Nicolau.
Nicolau said while AngloPlat continues to target refined platinum production of 2.4 million ounces, it would use process pipeline inventory stocks as required to meet market demand.
Based on Anglo Platinum's mining production forecast, process pipeline stocks and high smelter availability it is likely that AngloPlat could supply up to 2.6 million ounces should market demand increase during the second half of 2009, said Nicolau.
"Our Strategic Plan, based on our current view, ensures that the market will be adequately supplied and should improve our cost position from the upper half to the lower half of the cost curve.
"We are in the process of improving the reliability of our production capacity and entrenching cost management as a long term and sustainable culture in Anglo Platinum. This will ensure that we are well positioned to extract full value from our assets as the market recovers," he said.
- I-Net Bridge