Amplats on track to surpass prior year earnings on higher PGM prices

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Anglo American Platinum (Amplats), parent to Unki Platinum Mine in Zimbabwe has issued a positive earnings guidance for the year ended 31 December 2020 highlighted by an expected surge in the headline and headline earnings per share (HEPS) between 49% and 69% compared to the previous year ending 31 December 2019.

According to the Group’s trading statement for the period, “Headline earnings are likely to be between R27.8 billion and R31.4 billion (R18.6 billion in 2019) and HEPS will increase to between 10,586 cents and 11,957 cents per share (7,087 cents in 2019).”

Basic earnings and earnings per share (EPS) for the period are expected to increase by between 50% and 70% compared to the prior period translating to between R27.8 billion and R31.4 billion in monetary terms ahead of R18.5 billion in 2019, while EPS is expected to be between 10,586 cents and 11,957 cents per share compared to 7,046 cents in 2019.

During the course of the year, Amplats was forced to shut its operating facilities in line with lockdown conditions enacted by the South African government to curb the spread of COVID-19 infections. According to the Group, its managed mines operated at reduced levels for most of the year and even now are about 90% of capacity.

Meanwhile, technical impediments at processing units, the Anglo Converter Plant (ACP) A and B resulted in heavy downtime in redefined production. The Group said the build-up in work-in-progress inventory will be released over the next 24 months while the ACP Phase A rebuild was completed on 24 November 2020 and has been operating well and in line with expectations.

“The expected increase in headline earnings and basic earnings is primarily driven by a 71% increase in the rand basket price and partially offset by the impact of Covid-19 on M&C production, as well as the temporary closure of the Anglo Converter Plant (ACP) during the year, which resulted in lower refined production and sales from own production,” the Group said.

Unki performed well in the fourth quarter to 31 December 2020 recording a 7% increase in PGM production to 55,000 ounces ahead of the same period in 2019. Overall group performance was down during that period.

Listed on the Johannesburg Securities Exchange, Amplats is a leading primary producer of platinum group metals. Its mining, smelting and refining operations are based in South Africa as well as its two joint venture operations.

The Group will release results for the twelve months ended 31 December 2020 (“the period”) on the Stock Exchange News Service on 22 February 2021.