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 Chris Griffith, CEO, AmplatsChris Griffith, CEO, Amplats

Amplats slides into loss, output to be 2.1m oz

David McKay | Mon, 14 Jan 2013 09:46
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[] – ANGLO American Platinum (Amplats) prefaced its much anticipated restructuring saying it would report headline per share losses of as much as 628c for its 2012 financial year amid heavy output declines and a R6bn write-down of uneconomic projects and assets not in use.

"Basic earnings for the period includes losses of R463m resulting from the revaluation of certain investments and R6.606m (after-tax R4.756m) for the write down in the carrying value of various projects and other assets, not in use, that are considered not economically viable in the current market environment," it said in a statement to the JSE. Shares in Amplats fell 2% to R489/share.

Some 306,000 ounces of production had been lost during the second half of the year primarily owing to the two months of industrial action. The ramp-up of operations began on November 16, the company said.

Analysts said that Amplats' refined platinum output would probably come in at 2.1 million oz, well below the 2.2 million oz to 2.5 million oz it guided the market it would achieve as recently as October.

While lower production will give support to the improvement in the platinum price, there are questions as to the extent of Amplats' restructuring given the parlous state of labour relations and the current political environment around job losses.

However, Amplats is said to be ready to unveil its restructuring as early as this week, said Business Times.

Amplats shareholder, Anglo American, said in 2012 that had started a review of its operations. Styled first as an optimisation process, it's thought that the company will mothball some of its mines.

Likely targets for mothballing were thought to include the four Rustenburg operating sections that were the focus of the fiercest worker protests last year: the Khuseseleka, Thembelani, Khomanani and Siphumelele shafts.

On November 2, Chris Griffith, CEO of Amplats, said the South African platinum industry was in "severe financial distress" and that high wage settlements to get wildcat strikers back to work would lead to job cuts.

Amplats said today that losses in production had also resulted in an increase in cash operating costs in 2012, although it didn't specify the increase.

Basic earnings per share for the period is expected to decrease to a loss of between 2,487 cents and 2,624 cents from a profit of 1,374 cents for the comparative period, Amplats said.

Amplats is scheduled to report its operating and financial results for the 2012 financial year on February 4.

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