HomeNewsNortham earnings decline sharply

Northam earnings decline sharply

Aerial view of
Northam’s Merensky and
UG2 concentrator plants
Johannesburg, South Africa — MININGREVIEW.COM — 14 August 2009 – South Africa’s Northam Platinum Limited has posted a 73% fall in full year headline earnings per share, due to higher costs and weaker platinum prices which outweighed increased production.

The company forecast that output would be slightly higher in its current financial year, but that unit cash costs would rise on the back of inflation, and earnings would be determined largely by the rand/dollar exchange rate.

It pointed out that the average US dollar price received for its basket of metals had fallen by 42% to US$1 001 per ounce for the year to the end of June.

The decline was partly offset by the 18% decline in the value of the South African rand against the US dollar over the year, resulting in the average rand basket price over the year being 31% lower at R280 609 per kg.

But the effect of lower metal prices led to a 58% fall in profit to R630 million, with headline EPS “’ the key gauge of profit in South Africa “’ down 73% to 169 cents.

Production of metals in concentrate during the year rose by 3%to 302 474 ounces, the company added.

It said it had recorded an increase in sales volumes, which partially offset the negative effects of the lower metal prices received, limiting the drop in overall sales revenue. Total operating costs rose 17% to R1.906 billion.

Northam predicted that it would produce more in the year to the end of June 2010, barring any unforeseen production hiccups.