Amplats profit likely wiped out by five-month strike
Anglo American Platinum, the world’s largest producer of the metal, said first-half profit dropped as much as 96% after a five-month strike in South Africa disrupted mining.
Earnings per share excluding one-time items probably declined to a range of 20 South African cents to 80 cents in the six months from R5.14 a year earlier, Amplats, as the Johannesburg-based company is known, said in a statement on Monday. The stock fell to the lowest since July 1.
The decrease “is primarily due to the impact of the five-month industrial action, which impacted on operational performance”, it said.
The strike by more than 70 000 miners at Amplats, Impala Platinum and Lonmin cost the companies R23.9-billion in revenue and workers R10.6-billion in wages by the time it ended on June 24. The strike pushed South Africa’s economy into contraction in the first three months of this year as mining output plunged in the country that accounts for more than two-thirds of the mined production of the metal.
The shares decreased as much as 2.2% to R465.53 in Johannesburg, the lowest intraday price since July 1. They traded 1.2% lower at R470.50 at 9.30am.
“Amplats interims could provide direction for platinum group metals markets as the company may outline a restructuring plan following the strikes that potentially leads to reduced output and supportive of a longer term more balanced market, enabling price escalation and profits for platinum group metals producers,” Investec said in an emailed note to clients.
Amplats is reviewing the viability of all its mines, it said June 24. It will release a full earnings report on July 21.