Anglo PGM production up by 2% in H1
Anglo American Platinum announces strong financial results on back of robust market fundamentals! According to the key highlights, zero fatalities in H1 2019 at own managed operations, with the total recordable injury frequency rate (TRCFR) declining to the lowest on record & Strong Environmental, Social and Governance (ESG) credentials-achieving global recognition, placing first in Sustainalytics’ ranking of the precious metals sector (of 55 peers).
From financial aspect, they say, ‘Continued commitment to delivering industry leading returns to shareholders.’ Their EBITDA growth of 82% to R12.4 billion and accordingly headline earnings per share up 120% to R28.15 per share & also return on capital employed (ROCE) increased to 45%. Diversified PGM basket continued to drive earnings, with the Rand basket price up 33% per platinum ounce sold, on strong fundamentals.
According to the Anglo American Platinum’s planning, ‘the Steady PGM production in H2 is expected to deliver increased production. Project studies ongoing for value-enhancing projects at Mogalakwena & Mototolo/Der Brochen.
Anglo American Platinum reported another strong set of financial results, accompanied by an improvement in the overall safety performance of the business, reflecting management’s commitment to ensuring safe production while delivering value.
The Company benefited from much stronger global prices for the basket of platinum group metals (PGMs), particularly palladium and rhodium, and from a weaker rand against the US dollar. Operational performance was steady despite Eskom power outages and an unprotected strike at Mototolo Mine, and a stronger operational performance is expected in H2 2019.
Commenting on the results, Anglo American Platinum CEO Chris Griffith said: “We are pleased to report that Anglo American Platinum has delivered safe, responsible and profitable production in H1 2019. We are committed to eliminating fatal incidents on a permanent basis and ensuring safe operations, while delivering leading returns in the PGM industry.
Thanks in part to strong fundamentals for the PGM basket price, we have increased EBITDA by 82% to R12.4 billion, resulting in an increase in the EBITDA margin to 32% and doubling our return on capital employed (ROCE) to 45%.”
A temporary increase in work in progress (WIP) inventory should be largely refined in H2 2019. Despite this temporary increase in inventory, the Company generated operating free cash flow of R4.3 billion, further strengthening the balance sheet to a net cash position of R6.0 billion. This compares to the R2.9 billion net cash position at 31 December 2018.
The Company maintained stable PGM production (expressed as platinum, palladium, rhodium, gold, iridium and ruthenium metal in concentrate) in the period, with output decreasing marginally by 2% year-on-year to 2,146,900 ounces due to Eskom power disruptions in Q1, the unprotected strike at Mototolo in Q2, as well as once-off production benefits at Mototolo, Modikwa and Unki in the prior period. Platinum production decreased 3% to 515,800 ounces and palladium declined 4% to 417,500 ounces.
The Company has maintained its production outlook for the full year of 4.2 to 4.5 million PGM ounces (excluding toll material), with PGM sales volumes expected to be in line with refined production of 4.6 to 4.9 million PGM ounces.
