Anglo American Platinum has reported an 18% decline in earnings for the first half on lower PGM prices, one-off restructuring costs and inflation, which were partially offset by the group's cost reduction initiatives and higher sales volumes.
Revenue for the six months ended June was 19% lower at R52.2bn, the group said in a statement on Monday. Headline earnings were down 18% to R6.5bn, which translated into headline earnings per share of R24.65 from R29.84 a year ago.
An interim dividend of R9.75 per share was declared.
Refined PGM production was up 5% to 1.78-million ounces compared with the previous period, while metal-in-concentrate was down 5% to 1.76-million ounces. Sales volumes increased 9%, due to draw down of inventory, it said.
The dollar basket price per PGM ounce sold was down 24% at $1,442/oz.
The group is on track to meet R10bn capital expenditure and cost out target for 2024, with R4.7bn of savings achieved in the first half, of which R2.9bn were operating costs and R1.8bn stay in business capital
All-in sustaining cost amounted to $957 per 3E ounce, well ahead of the 2024 target of below $1,050.
The group was on track to sustain cash generation through a low PGM price cycle, it said.
Restructuring was progressing at pace, with statutory employee consultation complete and Mortimer Smelter on care and maintenance from the end of April.
The restructuring process in terms of section 189A of the Labour Relations Act had been completed, the largest effect being at Amandelbult.
Of the 3,700 jobs affected (including permanent and fixed-term positions) across the SA operations, about 75% had exited the company by the end of June, with the remaining 25% expected to leave in the second half of the year, the group said.
“The company responded decisively to an uncertain macroeconomic and a low PGM price cycle by restructuring the business in pursuit of operational excellence, increased levels of productivity, as well as ensuring cash generation,” CEO Craig Miller said.
“This is our value over volume strategy. As we set out in February, we are taking disciplined and decisive actions to reposition the business to ensure its long-term sustainability as a leading producer of PGMs. We are improving our competitive position, while preserving growth optionality from our world-class mineral endowment, for the benefit of all our stakeholders,” he said.
The group ended the first half with a strong R14.5bn net cash position, with restructuring and cost savings measures well on track, said Miller.
The group is optimistic about the demand outlook for PGMs as the metals play an important role in creating a greener world — whether in internal combustion, hybrid or hydrogen electric vehicle drivetrains.
Automotive demand outlook for PGM-containing catalytic converters was firmer as production plans and sales of pure battery electric vehicles stalled, with hybrids, which contain PGMs, gaining market share.
“The opportunities before us as a stand-alone company are both numerous and exciting. The planned demerger from Anglo American will create a more focused, independent global leader in the PGM industry,” he said.
He said the group was working to deliver a “responsible and orderly separation” from Anglo American by the end of 2025.
“Our management team and independent board is already working alongside a dedicated team from with Anglo American to achieve this”, he said.
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