Anglo American Platinum warns of 78% drop in H1 earnings

JOHANNESBURG – Anglo American Platinum, the world's top platinum producer, warned on Wednesday that first-half earnings will drop by as much as 78%, hit by lower sales and prices.

Amplats, a unit of global miner Anglo American, said it expects headline earnings per share for the six months to end-June to total between 270c and 280c, from 1 236c a year earlier.

Headline earnings are the main profit gauge in South Africa and exclude certain one-off, financial and non-trading items.

It said sales volumes were hit by the delayed restart of a converter plant after annual maintenance, and prices remained weak.

Higher-than-expected costs relating to labour, diesel and electricity also weighed on earnings, it said.

South Africa's platinum sector is battling the impact of weak demand, soaring costs and a government safety drive that has cut production as operations are suspended for safety violations.

Amplats also said it incurred a loss of R256-million ($31.39-million) resulting from revaluation of its investment in Wesizwe Platinum.

It also took a one-time accounting charge of R388-million related to a writedown of its Tumela 4 shaft project and a R505-million charge from the suspension of its Marikana operations.