Restructuring costs weigh down Amplats
Anglo American Platinum (Amplats‚) reported a strong rebound in operating profit for the 2013 financial year‚ but its restructuring costs and asset write downs pushed the world's largest platinum producer into an overall loss and it withheld its annual dividend.
Workers underground at an Amplats mine. Restructuring costs in Amplats mines have resulted in losses for the year to December. Image: Amplats
Amplats posted operating profit of R1.97bn for the year to December against a loss of R6.3bn a year earlier.
The group reported attributable diluted headline earnings per share of 553c after a loss of 560c a year ago. Headline earnings increased to R1.5bn compared with the loss of R1.5bn in 2012.
One-off restructuring costs of R1.5bn‚ asset write downs of R2.8bn and higher taxes pushed the group to an attributable loss of R1.4bn compared with a loss of R6.7bn a year earlier.
The diluted basic loss per share narrowed to 522c from a loss of 2‚547c the previous year.
Net debt grew to R11.46bn from R10.49bn before.
"Taking into account the net debt position of the group and considering future funding requirements‚ the board has decided not to declare a dividend for the 2013 financial year‚" the company said.
Amplats had undertaken a major restructuring of its business‚ which entailed a reduction of 7‚500 operational employees‚ and it had realised R1.9bn in benefits from direct and indirect cost savings.
Cost savings
"A significant number of cost-saving initiatives were implemented last year‚ which will result in the full annualised value being realised in 2014. In the year ahead‚ further cost and revenue benefits should be achieved through initiatives such as labour-efficiency programmes and supply chain initiatives‚" Chris Griffith, Amplats' chief executive said.
"Costs remained one of the largest challenges for the coming year‚" he added.
Amplats‚ Impala Platinum and Lonmin are locked in a wage dispute with the Association of Mineworkers and Construction Union (Amcu)‚ which is demanding a doubling of entry-level underground wages to R12‚500 a month‚ something the companies have repeatedly said is unaffordable in a single year.
"Cost inflation will remain a challenge in 2014 as real inflationary pressures from wages and electricity persist. Cash unit costs are expected to increase to between R18‚000 and R19‚000 per equivalent refined platinum ounce for 2014‚" Griffith said.
Amplats expected capital expenditure to be between R6bn and R7.3bn this year.
One of the top performing mines last year was Unki in Zimbabwe‚ where mining companies are obliged to have 51% indigenous ownership of their assets in that country.
"The company signed a heads of agreement in November 2012 with the Zimbabwean government that set out the key steps in implementing the approved indigenisation plan for Unki platinum mine. Little progress has been made in implementing this plan as at year-end and engagement with the Zimbabwean government continues‚" the company said.
On Monday (3 February) Griffiths confirmed that the National Union of Metalworkers of SA (Numsa) had called a strike at Amplats' processing division.
"As a percentage‚ Numsa was 1% of the group's labour force‚ but it was a significant proportion of workers at the precious-metal refinery‚" he said.
He said operations were continuing as normal and the company had "pretty normal attendance" at its processing division.
It would appear Numsa is joining Amcu's action to demand higher wages.
Source: I-Net Bridge
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