Anglo American Platinum (Amplats) today released results for the financial year 2012, revealing significant losses which it attributed to labour strikes in South Africa and global economic pressures.
The miner disclosed operating losses of 6,334 million Rand ($ 709.7 million) for the year ended December 31, 2012 – representing a 180 per cent drop on the previous year’s figures; Amplats achieved a 7,965 million Rand ($ 892.5 million) profit in 2011.
Headline earnings per share decreased year-on-year to a loss of 5.62 Rand ($0.63); as compared to a profit in 2011 of 13.65 Rand ($ 1.53), which Amplats attributes to lower sales, and lower realised metal prices.
Operating free cash-flow also declined substantially, dropping 10.13 billion Rand ($1.13 billion) on 2011 figures to a net out-flow of 717 million Rand ($80.3 million).
Meanwhile net debt also increased by 186 percent, reaching 10.49 billion Rand ($1.18 billion), up from the previous year’s figure of 3.66 billion Rand ($ 410 million).
The company attributed the extent of losses primarily to the rise in debt, macroeconomic tensions felt globally speaking but in particular in Europe, and supply disruptions – Amplats also making note of the significant labour strikes which caused on-going stoppages to production throughout the second half of the year.
With regard to the difficulties experienced, and aware of the funding requirements going-forward, the company announced that it would not be declaring a final dividend.
“While we are not pleased with the operational and financial performance, it is important to put things in context. Operationally, 2012 was a challenging year for Anglo American Platinum and the platinum industry as a whole. The year was characterised by lower prices, illegal industrial action which impacted production, unit cost, labour productivity and, of course, profitability and earnings.In a challenging year, characterised by increasingly volatile markets due to macro-economic weakness combined with supply disruptions, our revenue was impacted by a lower US dollar basket price,” explained Chief Executive Officer of Amplats Chris Griffith.
The platinum miner did however note that it expects the global demand for platinum to increase slightly in 2013, and said that if production in South Africa returns to pre-strike levels the market would be over-supplied.
Referring to the recently completed operational review, Griffith set out the plan for the short-term, saying: “The key recommendation of the portfolio review is the plan to reduce our production target to between 2.1 and 2.3 million ounces per annum to more closely align output with expected demand while retaining the flexibility to meet potential demand upside.”
He confirmed that in order to achieve maximum efficiency, Amplats intends to go ahead with placing four mines on long-term care and maintenance – a proposal that has caused significant controversy and opposition from labour unions and the government – given the impact on employment that such a move would have.
Amplats also reiterated that such closures are subject to an expedited consultation process agreed with the government and trade unions last week.
