Precious metals group Anglo American Platinum (Amplats) has warned that its profit could more than halve as a result of lower platinum group metals (PGM) sales volumes.
The company, valued at R328.5bn on the JSE, said on Monday in a trading statement for the 12 months to end-December, that it expected headline earnings would drop 33%-52% year on year to R38bn-R53bn.
This comes as PGM sales volume declined 26% and the same period in 2022 benefited from an increase in refined production, resulting in a drawdown in PGM ounces in 2023.
“In addition, the second half of 2022 was impacted by the planned structural rebuild of the Polokwane smelter — a process that was extended by approximately two months following the receipt of substandard materials identified through our quality assurance processes, leading to a build-up in work-in-progress inventory,” the company said.
Higher inflation also pushed up mining and processing costs.
CEO Natascha Viljoen told Bloomberg in an interview last week that investor payouts would drop as the power crisis in SA curbed output and pushed up costs.
“Will our investors continue to get their returns? Yes, they will, but the size of returns will be slightly softer,” Viljoen said. “Will it be the returns we had in 2021? probably not.”
The company made a record payout in 2021 after a recovery in production, but largely due to stratospheric PGM prices.
The company will release the latest results on February 20.
Correction: February 13 2022
A previous version of this story referred to the subject as Anglo American instead of Anglo American Platinum. We regret the error.
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