Amplats to delight shareholders with 100% payout of record interim earnings

Natascha Viljoen, CEO, Anglo American Platinum

ANGLO American Platinum (Amplats) is to pay an R175 per share interim dividend equal to 100% of the record interim headline earnings announced today.

Headline earnings of R46.4bn were nearly six times higher than the R6.7bn unveiled at the interim stage last year, and sets the groundwork for a historic full-year performance.

The dividend consists of an R70 per share dividend in terms of the firm’s policy to pay 40% of headline earnings topped up with an R105 special dividend.

As previously flagged the rand basket price for the firm’s platinum group metal (PGM) production was 29% higher year-on-year.

But Amplats’ financial performance was also heavily influenced by a significant improvement in production, in particular refined output which was 128% higher year-on-year at some 2.33 million ounces. This represents a strong recovery following the commissioning of the firm’s Anglo Converter Plant (ACP) in the second half of 2020.

In February last year, Amplats announced the temporary closure of its processing facilities in Rustenburg following separate technical incidents at ACP A and B. ACP A was rebuilt in November whilst ACP B will be back in operation in the next four to five months.

Higher refined output saw Amplats reduced its one million oz inventory from the ACP processing outages last year by about 200,000 oz, said Craig Miller, CFO of Amplats in a media call. Amplats maintained its outlook for removing the capital build-up to 2022.

“The fundamentals of our PGMs and base metals remain robust,” said Natascha Viljoen CEO of Amplats. “Overall, we achieved strong earnings, we have a strong balance sheet with net cash of R57.6bn and increased our return on capital employed to 207%.”

The rhodium and palladium prices surged to all time highs of $30,000/oz and $3,000/oz respectively during the six month period. Platinum achieved a six year high of above $1,300/oz. The minor PGMs, iridium and ruthenium, also made positive contributions as strong industrial demand took iridium to an all-time high of $6,300/oz and ruthenium to a 14-year high of $800/oz, said Amplats.

Rhodium prospects

Commenting during a media call, Viljoen said that the rhodium price “would remain robust” for the remainder of Amplats’ 2021 financial year despite some ‘thrifting’ of the metal with platinum by automakers. “It can be thrifted to some extent but not fully.

Automotive demand is also expected to grow towards the end of this year as the industry recovered from a shortage of semi-conductors which led to a four million unit reduction in automobiles. As a result, rhodium would move back into balance this year before the deficit re-developed in 2022, said Miller.

Amplats’ rhodium production in the second quarter of the 2021 financial year of 94,000 oz- when the full benefit of the returning ACP was felt – was 53% higher than in the first quarter of 2021 and 208% more than in the second quarter of its 2020 financial year. The firm’s rhodium output is about 40% of the 750,000 oz/year rhodium production.

Commenting on the potential sale of Bokoni Platinum Mines, Amplats’ mothballed mines in the northern part of the Bushveld, Miller said that bidders had been identified. “Conversations are ongoing and we hope to finalise this in the near future,” he said.

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