South Africa's Amplats reports 43% drop in half-year profit

South Africa's Anglo American Platinum on Monday reported a 43% fall in half-year profit due to weaker platinum group metal (PGM) prices and lower volumes compared with record sales a year ago. Amplats' headline earnings per share (HEPS) - the main profit measure in South Africa - fell to 101.4 rand ($6.02) for the half year that ended June 30, from 176.47 rand a year ago.

South Africa's Anglo American Platinum on Monday reported a 43% fall in half-year profit due to weaker platinum group metal (PGM) prices and lower volumes compared with record sales a year ago.

Amplats' headline earnings per share (HEPS) - the main profit measure in South Africa - fell to 101.4 rands ($6.02) for the half year that ended June 30, from 176.47 rands a year ago. Amplats Chief Executive Officer Natascha Viljoen said inflationary pressures and tightening monetary policy would continue to have an impact on the mining industry.

Amplats maintained its guidance for 2022 unit cost of production at between 14,000 and 15,000 rands per PGM ounce, based on an oil price of around $100 per barrel. That would represent a year-on-year cost increase of between 9.1% and 16.9%. Capital expenditure guidance for the full year was reduced to 16 billion and 17.5 billion rands.

PGM prices have come off historical highs seen during early 2021 as the global economy recovered from pandemic-related disruptions, but Amplats said the basket price in the first half of 2022 is the second-highest average price on record, showing strong underlying market fundamentals despite the price volatility. Amplats, the world's biggest PGM producer, ended 2020 with a backlog of around one million ounces of PGM as it rebuilt and recommissioned its converter plant. Most of this inventory was refined and sold during 2021, resulting in higher-than-normal sales and earnings.

The company declared an interim dividend of 81 rands per share, compared to 175 rands per share last year. ($1 = 16.8452 rand)

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