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Johannesburg - Anglo Platinum [JSE:AMS], the world's top
platinum producer, warned on Wednesday that first-half earnings will drop by as
much as 78%, hit by lower sales and prices.
AngloPlat, a unit of global miner Anglo American [JSE:AGL],
said it expects headline earnings per share for the six months to end-June to
total between 270 and 280 cents, from 1,236 cents a year earlier.
It said sales volumes were hit by the delayed restart of a
converter plant after annual maintenance, and prices remained weak.
Higher-than-expected costs relating to labour, diesel and
electricity also weighed on earnings, it said.
South Africa's platinum sector is battling the impact of
weak demand, soaring costs and a government safety drive that has cut
production as operations are suspended for safety violations.
AngloPlat also said it incurred a loss of R256m resulting from
revaluation of its investment in Wesizwe Platinum [JSE:WEZ].
It also took a one-time accounting charge of R388m related
to a writedown of its Tumela 4 shaft project and a R505m charge from the
suspension of its Marikana operations.
Anglo American is undertaking an operational review of
AngloPlat, which it is expected to conclude later this year.
Analysts expect the review to outline the planned closure of
some higher cost deep shafts, signal some potential sales or exits from some
joint ventures with rivals, and focus its spending.
Shares closed up 0.3% at R430 before the announcement.
