eBusiness Weekly
Enacy Mapakame
The world’s leading primary producer of platinum group metals, and parent company for Unki Mine- Anglo American Platinum, expects its earnings to more than double for the financial year to December 31, 2019 on steady operational performance.
Financials for the year under review will be released on February 17. The group is listed on the Johannesburg Stock Exchange (JSE).
Anglo issued a profit warning as it anticipates headline earnings and headline earnings per share for the period are to increase by between 131 percent and 151 percent respectively compared to the prior year.
According to the platinum giant, headline earnings are likely to be between R17,545 billion and R19,055 billion from prior year’s R7,588 billion.
Headline earnings per share are seen increasing to between 6,689 cents and 7,265 cents per share compared to 2,893 cents in 2018.
For the period under, basic earnings and earnings per share for the period are likely to increase by between 157 percent and 177 percent respectively compared to the prior year.
Anglo indicated that basic earnings are likely to be between R17,545bn and R18,900bn from R6,817bn in 2018 last year while earnings per share should be between 6,689 cents and 7,205 cents per share compared to prior year’s 2,599 cents.
“The expected increase in headline earnings and basic earnings is primarily driven by a 38 percent increase in the rand basket price and continued steady operational performance, notwithstanding the loss in production (38 000 PGM ounces) and deferred refined production (89 000 PGM ounces to be refined in 2020) due to Eskom power outages,” said Anglo in a notice to its shareholders.
Production wise, Anglo’s metal in concentrate platinum and palladium production both increased by 10 percent, to 531 700 ounces and 360 400 ounces, respectively.
Own mined platinum production increased by 18 percent to 361 900 ounces and palladium production increased by 17 percent to 275 000 ounces.
Refined platinum production decreased by 18 percent to 629 700 ounces and refined palladium production decreased by 20 percent to 396 600 ounces.
“Excluding the impact of the tolled volumes that were previously purchased as concentrate, refined platinum production was flat and palladium decreased by 6 percent as improved operational performance at the processing facilities was offset by the impact of Eskom power outages.
“These power outages in Q4 resulted in an inventory build-up of circa 45,000 platinum ounces and circa 27,000 palladium ounces. Platinum sales volumes decreased by 14 percent to 668,300 ounces and palladium sales volumes decreased by 4 percent to 435,800 ounces due to lower refined production in the period.
The local unit, Unki Mine’s 2019 platinum output rose 4 percent to 89 400 ounces from 85 900 ounces in 2018.
For the fourth quarter of 2019 production declined 2 percent to 23,300 ounces from 23,700 in the previous quarter.
But in terms of a year-on-year quarterly comparison, the local unit’s fourth quarter output was up 6 percent compared to the 22 000 produced in the prior comparable period in 2018.
Unki’s palladium output also jumped last year from 2018, rising 5 percent to 79 200 ounces from 75 500 ounces.
However, the mine’s palladium output declined by 6 percent in the fourth quarter to 20 000oz from 21 300 ounces in the previous quarter.
On a year-on-year (quarterly basis) comparison, the local platinum producer’s palladium production rose 2 percent from 19,6 percent in the fourth quarter of 2018.
