Northam Platinum earnings lose sheen

NORTHAM Platinum, one of South Africa’s smaller platinum producers, reported a 30.1 percent fall in first- half headline earnings as finance and tax charges swelled.

Headline earnings per share for the six months to end December were almost a third lower at 36.3c from 51.9c in the first half of its previous year, the company said.

Headline EPS is the key measure of profitability in South Africa and strips out certain one-off and non-trading items.

Production of precious metals in concentrates climbed 6.5 percent to 157 183 ounces and precious metals sales grew 4.4 percent to 177 655 ounces, the company said.

Northam managed to escape last year’s violent labour unrest unscathed but its future will be impacted by the crisis in the South African platinum sector.

“Against the background of a volatile labour relations climate in the South African mining sector, Northam’s results reflect a sustained operational recovery at the company’s Zondereinde mine,” Northam said.

Threats of a worldwide shortage of platinum group metal ( PGM) supplies from South Africa helped to stem the decline in the dollar prices of PGMs.

The weakening of the rand against the US dollar also played a hand in improving the rand basket price, which helped push up revenue.

While social and economic uncertainty is expected to dominate the platinum agenda this year the company said it would deliver an improved operational performance from the previous year.

Northam did not declare an interim dividend, choosing instead to ensure it has enough cash for the R4 billion development of its flagship Booysendal mine.

It also wants to cushion itself against the uncertainty in the South African mining industry.

The company’s shares have gained 20.86 percent in the past 12 months, while the JSE’s Platinum Index has fallen 13.10 percent. – Reuters