Angloplat sees a more “moderate” dividend policy

[] — ANGLO Platinum will adopt a more “moderate’ dividend policy in future after learning lessons from the past, said Bongani Nqwababa, financial director of the world’s largest platinum producer.

A shareholder, Theo Botha, quizzed management at the group’s annual general meeting in Johannesburg about a special resolution allowing the company to buy back up to 20% of its shares after a year in which no dividend was paid and the R12.5bn rights issue was held to recapitalise the group and some R22bn of gross debt within the group before the rights issue.

Nqwababa said market conditions were different over recent years, allowing the group to pay out healthy dividends, but this would be reviewed in future.

“We learn from history,’ Nqwababa said. “We’ll have a more moderate dividend policy going forward than we’ve had.’

Anglo Platinum paid out a R16bn dividend in 2007 and R13bn in 2008, prompting Botha to question whether this had been a prudent policy seeing as the group just a couple of years later had to raise R12.5bn.

Anglo Platinum told the market on Monday that its R12.5bn rights offer had a 99.5% subscription at R502.18 per share.

All the resolutions put to shareholders, including fee hikes of between 20% and 30% for non-executive directors, were passed unanimously. Anglo Platinum has the right now to buy back up to 20% of its shares.

Nqwababa said this was merely a contingency for if and when economic conditions improved to the point that Anglo Platinum this year generated cash surplus to its needs, which incorporated the resumption of dividend payments.

Botha pointed out this 20% correlated almost exactly with the proportion of shares held by minorities. Anglo American holds 79.7% of Anglo Platinum and is has long been a question in the market when it will mop up the minorities.

Anglo Platinum intends holding its capital expenditure at around R8bn a year in the medium term, while stay-in-business capital will be around R3bn-R4bn a year.

“Prudent capital allocation will remain central to the management of our balance sheet, which we believe will be appropriately capitalised, following the rights issue, to take us through the cycle,’ Anglo Platinum said in its 2009 annual report.

Anglo Platinum expects to produce 2.5 million ounces of refined platinum in 2010, keeping cash operating costs to below R11,000 per refined platinum ounce.

It expects to match that production level – and cost — in 2011 and then increase output to match increasing demand, which Anglo Platinum forecasts at three percent a year.

CEO Neville Nicolau, who has won high praise from some analysts for transforming the company, cutting costs and suspending three marginal shafts.