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Anglo American Platinum expects HY earnings decline due to lower PGM price, lower sales and higher costs

Kitco Media
By Vladimir Basov
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(Kitco News) - Anglo American Platinum (JSE: AMS), a member of the Anglo American Group, reported today that its earnings for the six months ended 30 June 2023 (H1 2023) have decreased largely due to a decline in revenue as a result of the lower average PGM basket price relative to the corresponding six months in 2022.

The company said that the main contributors to this were declines in rhodium and palladium US$ prices, which were 47% and 29% lower respectively, adding that the weakening ZAR/US$ exchange rate partially mitigated the US$ price impact on the overall rand basket price which decreased by 15% against the period ended 30 June 2022.

Furthermore, according to a press release, sales volumes from the company’s own production (excluding trading) were 12% lower compared to H1 2022.

“This reflected lower refined production as a result of the Polokwane smelter needing to ramp-up in January following its rebuild; scheduled annual maintenance and asset integrity work at the processing operations; and the impact of Eskom load-curtailment, which resulted in deferred production of c.66,400 PGM ounces,” the company said.

Anglo American Platinum added that continued inflationary pressure and exchange rate volatility have also led to higher mining and processing costs.

As a result, the company expects that headline earnings and HEPS are likely to decrease by between 65% and 75% compared to the six months ended 30 June 2022, and EPS for the period are likely to decrease by between 65% and 75% compared to H1 2022.

Anglo American Platinum is a member of the Anglo American plc Group and is a leading primary producer of platinum group metals. The company’s mining, smelting and refining operations are based in South Africa. Elsewhere in the world, the group owns the Unki platinum mine and smelter in Zimbabwe.

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Vladimir Basov

Vladimir (PhD, MEng in Mining) is a professional mining engineer, scientist and analyst that has more than 20 years of practical in-field and research experience. He is particularly interested in collecting, processing baseline data and writing insightful data-driven mining industry analytics, articles, statistical and research reports.

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