Amplats posts revised FY trading update, expects higher earnings

JOHANNESBURG (miningweekly.com) – Platinum miner Anglo American Platinum (Amplats) on Monday said it now expects its earnings for the year ended December 31, to be considerably higher than what it initially reported in November, despite additional impairments impacting on its basic earnings.

Headline earnings for the 2016 financial year are expected to increase to between R1.64-billion and R2-billion from the R107-million achieved in 2015, with headline earnings per share (HEPS) increasing to between 625c and 760c a share in 2016, from 41c apiece the year before.

In a tentative trading update released in November, it was initially expected that headline earnings and HEPS would be R21-million and 8c apiece higher respectively.

While the November update indicated expectations of a respective R2.4-billion and 928c a share hike in basic earnings and earnings per share (EPS), the revised trading update tabled potential basic earnings for 2016 at between R550-million and R670-million and EPS of between 210c and 255c, a turnaround on the prior year’s loss of R12.1-billion and 4 638c a share.

“Basic and headline earnings were impacted by the lower dollar metal prices, a lower 2016 stock count gain than 2015, which was abnormally high, offset by a weaker rand and cost improvement initiatives across the company,” Amplats said in the update on Monday.

Amplats largely attributed the increase in basic earnings to R14-billion of impairments and write-offs in the comparative period – R1.8-billion impacted headline earnings – offset somewhat by additional second-half impairments of R283-million – R130-million for the investment in Bokoni and R153-million on the investment in Pandora.

Basic earnings for the period had also been hit by a R919-million loss on the disposal of the Rustenburg operations to Sibanye Gold.

Meanwhile, Amplats also concluded a 26% broad-based black economic empowerment transaction with regards to its Amandelbult chrome plant, with the company recognising a R156-million, or 60c a share, International Financial Reporting Standards 2 share-based payment one-off charge impacting both basic and headline earnings.

Amplats will publish its financial results on February 15.