Anglo American Platinum on track despite profits fall

22nd Jul 2024 08:01

(Sharecast News) - South Africa's Anglo American Platinum said its restructuring programme remained on track on Monday, as it posted a sharp drop in half-year profits.

The Johannesburg-based business - which is due to be spun out its parent company, London-listed miner Anglo American - announced a tranche of cost of measures in February, including cutting 3,700 jobs.

Amplats said around 2,800 employees had left the company since then, with the remaining 25% due to leave in the second half.

It also said it remained on track to deliver annual cost savings of R10bn (£420m) by the end of the year, with R4.7bn achieved so far.

The update came as Amplats said earnings before interest, tax, depreciation and amortisation in the six months to 30 June had fallen 8% to R12.3bn.

Headlines earnings were 18% lower, at R6.5bn.

Amplats attributed the decline to inflation, one-off restructuring costs and a 24% slide in realised platinum group metals (PGM) dollar basket prices, to $1,442.

Refined PGM production rose 5%, to 1.78m oz, while metal-in-concentrate fell 5% to 1.76m oz.

Sales volumes increased 9%, largely due to drawn down of inventory.

Craig Miller, chief executive, said: "We continue to focus on our strategic priority of going beyond resilience to thrive through change, as we navigate through an ever-evolving operating landscape.

"The company responded decisively to an uncertain macroeconomic and low PGM price cycle by restructuring in pursuit of operational excellence [and] increased levels of productivity."

Anglo American's controlling interest in Amplats is due to be distributed to shareholders by the end of 2025.

Miller told reporters that the firm was considering a possible secondary listing in London once the break with Anglo American is complete. Amplats is already listed in Johannesburg, with Anglo American holding a 78% stake.