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South Africa's Impala Platinum Warns On Profits
An employee sets out and sorts ingots of 99.97 pure platinum at the Krastsvetmet nonferrous metals plant in Russia's Siberian city of Krasnoyarsk April 12, 2012. PHOTO By Reuters/Ilya Naymushin
16/08/2013
JOHANNESBURG (Reuters) - South Africa's Impala Platinum warned that its full-year earnings fell by around half, hit by poor performance at its Rustenburg mine and after it wrote down the value of some assets.
Impala, the world's second-largest producer of the precious metal, said on Friday that headline earnings per share fell to between 308 and 343 cents in the year to end-June, down from 685 cents a year earlier, the second year running for a steep drop.
Impala is the first major platinum miner to write down the value of its assets after a steep fall in platinum prices during the first half of 2013.
Shares rose 7.3 percent, outperforming Johannesburg's index of platinum companies, on investor relief after the expected falloff in earnings.
Headline EPS, the main measure of profit in South Africa, excludes certain on-time items. Impala is due to release its detailed results on August 29.
Impala said it was hit by 2.3 billion rand in write downs during the financial year, including a 1 billion rand reduction in the value of African Platinum Plc, which it acquired in 2007.
"It is the right time for platinum miners to start impairing assets; we have already seen it among gold producers," said SBG Securities platinum analyst Justin Froneman in Johannesburg.
Impala paid 4.2 billion rand for the London Stock Exchange-listed platinum junior African Platinum, including its highly prospective Leeuwkop project.
The company continued to invest in Leeuwkop and three other Rustenburg shafts at a time other companies were closing and mothballing operations. Production from the four mines will replace declining output from its older shafts.
Impala's Rustenburg operations were crippled by a strike in early 2012 and took a long time to recover as productivity and worker morale remained hampered by a union turf war which rumbles on along the platinum belt.
The company booked an impairment of 603 million rand in its first half, of which 550 million rand was for the potential non-recovery of an outstanding receivable amount from a recycling toll refining customer.
The full year impairment is now at 1.3 billion rand, the company said.
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