Amplats warns of dramatic decline in full-year earnings

January 25, 2016, 9:10pm

By Allan Seccombe, Business Day Live

ANGLO American Platinum warned shareholders of a fall in basic earnings of up to 2,055% and a maximum 92% drop in headline earnings for its past financial year, due to impairments and write offs of R14bn and restructuring costs.

Amplats, which is 80% owned by Anglo American, said it would report a basic loss for the year to end-December of between R12.1bn and R12.2bn, compared with the previous year’s earnings of R624m.

Its basic loss per share would be between R46.30 and R46.65, compared with earnings of R2.39 per share in the previous year.

The reason behind the dramatic decline was the impairment and write off of assets by R14bn after tax, of which R1.8bn affected headline earnings.

Headline earnings of between R60m and R135m were forecast — as much as 92% lower than last year’s R786m. Headline earnings per share were forecast between 25c and 55c compared with last year’s R3.01.

The latest outlook also marks a deterioration from the update issued in December, which said headline earnings for the year to December 2015 would fall 20% to R157m, and HEPS would fall 20% to 60c.

Amplats will report restructuring costs of R850m for the year as it cut support and service functions. Amplats is selling three mining operations around Rustenburg to Sibanye Gold for at least R4.5bn.

Its Union mine is also up for sale.

Amplats has written off loans to Atlatsa Resources, a struggling platinum mining company that bought the Bokoni assets from Amplats.