RBPlat gives up 5% as interim loss hits home

[miningmx.com] – PROVING that no mining company is exempt from poor markets and ill fortune, Royal Bafokeng Platinum (RBPlat) warned shareholders it would report an interim loss owing to a raft of problems.

Shares in the company were about 5% down on the Johannesburg Stock Exchange (JSE) on July 13 whilst the share had given up nearly 7% in the last seven days. RBPlat is currently valued at R7.5bn on the JSE.

Chief among the factors to hit the firm’s bottom line was a recently announced R50m up-front cash settlement with the South African Revenue Service (SARS) in respect of a dispute relating to tax payable in the firm’s 2008, 2009 and 2010 financial years.

The company also said lower platinum group metal prices, interruptions to production at its Bafokeng-Rasimone Platinum Mine related to load-shedding and safety stoppages, and cost increases related to the front-end loaded nature of wage increases took RBPlat to a loss of between 52 cents and 69 cents per share in the half-year ended June 30.

This compares to 116c/share in headline earnings in the previous financial year and full-year figures 38% higher year-on-year which moved RBPlat CEO, Steve Phiri to declare in March: “I know I am bragging here, but if you are beautiful, you are beautiful”.

A fatality during the first quarter also resulted in a higher proportion of lower grade UG2 reef mining and reduced Merensky reef production, the company said. The interruptions in power supply limited concentrator plant availability and output.

On a normalised basis, which strips out the effect of the tax charge, RBPlat said headline earnings would be between 97% and 84.2% lower year-on-year but in positive territory of some 4c to 21c/share.

Although RBPlat was hit badly in the interim, its five-year wage deal means that the company won’t be part of wage negotiations due to kick off in the South African platinum sector next year.