Eastplats results make for worrying reading
Eastern Platinum (Eastplats), it could be argued, has virtually dropped off the radar of anyone following SA’s platinum mining industry.
Eastplats shut its operations in 2012 and 2013 and has since leaked cash steadily to keep its mines in care and maintenance.
Despite bringing revenue into the company for the first time since then with a chrome project, it’s hard to find any reason for investors to be thrilled at the prospect that Eastplats may or may not return to producing platinum group metals (PGM).
Its statement for the six months to end-June can best be described as difficult and messy. The income statement is straight forward enough, but it’s the unpaid money owed to Eastplats by its chrome offtake partner, as well as the burgeoning debt of $40m, where there are signs that perhaps all is not well.
Eastplats itself flags concerns about its ability to remain a going concern because of its balance sheet, concerns about repaying the $40m, and relatively high maintenance costs that erode advances in operating profit.
Not only that, but it’s run into a hornets’ nest around BEE, with litigation and pending share disposals by its empowerment partners and the eye of the department of mineral resources & energy firmly fixed on these woes. Any setback in empowerment levels could lead to mining rights being forfeited or altered and this is the last thing Eastplats needs.
How it’s going to fund a return to PGM production given these material uncertainties is not answered by management in the latest report, but it does go some way towards explaining why Eastplats, with a market cap of R241m, is trading at less than a third of the R9 a share it exceeded three years ago.
APPLE CARD
The Financial Times reports that Apple hopes to attract customers to its Apple Pay service with a shiny, titanium lure. The Apple Card, created
with Goldman Sachs, is a bedazzling kicker to a digital product. Why else would it offer a lacklustre version of services already available online?
Unlike an iPhone, the credit cards Apple is expected to launch this month lack nearfield communication. There is no point waggling one in front of a reader when buying something in person. Rewards are less impressive, too.
For Apple and Goldman Sachs the point of the card is visibility. Apple Card has no fees, meaning issuers cannot divvy up a cut of the interest on balances or late fees. But Goldman Sachs can use its first foray into credit cards to show its commitment to personal finance.
Apple Pay has had only middling success. In China, it has struggled to take on domestic apps. At home it is less visible than Square and less popular than PayPal’s money transfer service, Venmo. Apple Pay customers are estimated to be just a small fraction of the 900-million active iPhones.
Compare Apple Card with Facebook’s plan to launch a new digital global currency and the ambition looks stunted. This is a side bet, part of Apple’s plan to expand services amid a revenue slowdown in hardware.
To move to the heart of Apple’s business, Apple Card must prove it can pull more customers into mobile payments. If it can, Apple Pay could become a far bigger money-spinner than services such as music or news. /©