Chris Griffith resigns as CEO of Amplats on day firm pays mammoth R14.2bn dividend

Chris Griffith, CEO, Anglo American Platinum

CHRIS Griffith, CEO of Anglo American Platinum (Amplats), called time on his seven year stint as CEO of the firm saying it had represented “the pinnacle” of his career.

His resignation is effective April.

“After more than seven years at the helm, and given all that we as a team have achieved, this is now the natural time for the next generation of leadership to take this business forward and deliver further value,” he said in a statement.

Amplats said Griffiths’ replacement would be an internal appointment.

Griffiths goes out on a high after taking over at Amplats during a period of restructuring and plummeting platinum prices.

During this period, Griffiths famously clashed with former mines minister, Susan Shabangu, who reacted angrily to the firm’s plan to cut 400,000 ounces of platinum production, potentially affecting 14,000 jobs. She threatened to withdraw Amplats’ mining licence, but the restructure proceeded in any event.

Today, the company’s shares are more than 200% stronger than in 2013, assisted by sky-high pricing for palladium and rhodium in particular.

In February 2019, Amplats approved a R11,25/share payout, its largest in 10 years having resumed the dividend and hiking the payout ratio to 40% of earnings.

This performance, however, was dwarfed by the publication of today’s numbers representing the financial year ended December 31, 2019 in which Amplats unveiled a final dividend of R11.2bn, equal to R41.60/share, and a special dividend of R25/share – its first since 2001 – taking the total dividend to R14.2bn equal to R52.60/share.

This was on the back of a doubling in EBITDA to R30bn year-on-year. Net cash was R17.3bn – the firm’s strongest ever cash position. Given net debt peaked at R14.8bn in 2015, the current net cash position represented a turnaround in R32bn including dividend payments.

Headline earnings for the 12 months ended December 31 came in at R18.6bn, an increase year on year of 145%. Headline share earnings were R70.87/share.

The improvement, as stated previously in Amplats’ trading statement, was partly based on a 38% improvement in the rand basket of PGM prices.

The other major highlight of the 12 month period was that it occurred without a single fatality which underlined a strong production period. Total platinum group metal (PGM) production came in at 4.4 million ounces, a 1% year-on-year improvement, and refined PGM production of 4.6 million oz, despite interruptions as a result of Eskom load-shedding in which 38,000 PGM oz were lost. The impact of Eskom led to an increase in work-in-progress inventory by 89,000 PGM ounces, which will be refined in 2020.

Amplats’ revenue from PGM sales increased 33% in the 2019 financial year to R100bn year-on-year with palladium and rhodium sales comprising 58% of the total. Pricing for palladium and rhodium increased 48% and 73% respectively last year.

And whilst the outlook for metals across the board was bullish, Griffith said there was an increasing chance of substitution of palladium in gasoline autocatalysts by platinum. “The concept of replacing palladium with platinum is more likely but not immediately,” he said.

Asked to comment on his decision to resign, Griffith said: “I’ve done what needed to be done for the company. It has got good momentum and this is not the peak, but it is a good time for succession.

“I will look for the next challenge. I believe I have got the energy and potential and perhaps I will look for something different.”

His decision to step down – about which he had been considering “for a little while” did not presage a switch in company strategy, or disagreement with the major shareholder, Anglo American. “It does not signal major change in strategy at all. I’m 55 years old. I think I’ve got one or two positions left in me so you don’t need to scratch for an ulterior motive.”