HomeNewsNortham's 12% earnings increase

Northam’s 12% earnings increase

Aerial view of the
Merensky and UG2
concentrator plants
at Northam
Johannesburg, South Africa — MININGREVIEW.COM — 26 August 2008 – Northam Platinum Limited – the JSE-listed company which wholly owns and operates the cash-generative Northam platinum mine and metallurgical complex on the western limb of the Bushveld Complex – has posted a 12% rise in full-year earnings despite weaker output, and has forecast rising production and prices in the current year.

The company’s results announcement for the year ended 30 June 2008 said that Northam – now a unit of Mvelaphanda Resources (Mvela) – was poised to fully acquire a huge platinum deposit, which it planned to develop and launch itself into the big league of platinum players.

“With the softer platinum price, there are already some signs of a modest increase in demand from jewellery manufacturers," said company chief executive Glyn Lewis.

"For the automobile sector, which we believe will continue to be the principal driver of PGM prices, emissions legislation continues to tighten,” he added, “and we believe that these factors – combined with the prospect of higher vehicle sales – will continue to support demand. We are confident that the outlook for fundamental demand for PGMs remains sound,” he insisted.

The company’s results announcement explained that the lower output, together with an increase in metal inventories, had accounted for the 19.8% drop in unit sales to 276 059 oz, partially offsetting the average rand basket price which increased by 37.6% to R409 159 per kg.

Total operating costs had increased by 19.5% from R1 361 million to R1 627 million, reflecting inflationary cost pressures.

Operating profit was 13.2% higher at R2 277 million, with the operating margin increasing to 58.6% from 53.8% in the financial year ended 30 June 2007, the statement added. Improved cash flows and higher interest rates had a positive impact on investment income which was 16.6% higher at R98 million.