Anglo American Platinum (Amplats) said yesterday, despite a 2% increase in the rand basket price, the expected decrease in annual headline earnings and basic earnings was primarily driven by a decrease in sales volumes of platinum group metal (PGM).
In its trading statement for the 12 months ended December 31, 2022 the mining firm said headline earnings for the period were likely to decrease by between 33% and 52% compared to the 12 months ended December 31, 2021.
Headline earnings were likely to be between R38 billion and R53bn, compared to R79bn in the prior period, and headline earnings per share would decrease to between R144.31 and R201.28 per share compared to R300.42 in 2021.
According to the JSE-listed PGM miner, this has been driven primarily by a 26% decrease in PGM sales volumes.
Also, the second half of 2022 was impacted by the planned structural rebuild of the Polokwane smelter – a process that was extended by about two months following the receipt of sub-standard materials identified through its quality assurance processes, leading to a build-up in work-in-progress inventory.
In 2021, due to the surge of PGM prices, which led to a recovery in production, Amplats’s shareholders received a record payout.
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“Will our investors continue to get their returns? Yes, they will, but the size of returns will be slightly softer. Will it be the returns we had in 2021? Probably not,” she said.
Amplats said inflationary pressures had led to higher mining and processing costs, partially offset by a decrease in purchase-of-concentrate costs due to lower receipts.
“Net deferred consideration re-measurements from the disposal of Rustenburg and Union mines and the acquisition of Mototolo were negative compared to the large increase in 2021, resulting from a change in economic and operating assumptions year on year. Taxation and royalties decreased in line with lower profits,” it said.
The prior period benefited from an increase in refined production due to a strong performance from the ACP Phase A unit following its rebuild and recommissioning in November, 2020 and the consequent increase in work in progress in 2020.
“As a result, there was an additional draw-down of 1 million PGM ounces from work-in-progress inventory in the prior period," it said.
Amplats is scheduled to release its 2022 results on Monday, February 20.
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