HomeNewsAmplats warns of 96% fall in earnings due to strike action

Amplats warns of 96% fall in earnings due to strike action

Anglo American Platinum (Amplats) has warned that its interim headline earnings could fall to as little as 20 cents a share from 514 cents a share in the previous financial year owing to the five-month strike, representing a 96% drop.

Basic earnings per share for the six month period to end-June was expected to decrease to between 130 cents and 180 cents from 468 cents for the comparative period, it said. Basic earnings for the period include a gain of R243m, equivalent to 93 cents per share, arising on the final phase of the refinancing transaction with Atlatsa Resources Corp, it said in a statement to the JSE.

“The platinum belt labour strikes have had an adverse impact on sentiment, restricting share performance (of Anglo American) in our view, despite the fact that inventories were sufficient to maintain a high level of PGM (platinum group metals) sales volumes. The second half is likely to more extensively reflect the disruption,” said Investec analyst Albert Minassian.

The company, which is controlled by Anglo American, is expected to report its operating and financial interim figures on July 21, as well as provide more information about restructuring the business after the longest strike in SA’s history.

“Amplats interims could provide direction for PGM markets as the company may outline a restructuring plan after the strike that potentially leads to reduced output and supportive of a longer-term more balanced market enabling price escalation and profits for PGM producers,” Investec said.

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