World number-two platinum miner Impala Platinum (Implats) on Thursday reported headline earnings per share of R28,06 for the half-year to December 2005, up 78% from R15,81 in the half-year to December 2004 due to stronger dollar metal prices.
The increase in the group’s headline earnings was better than it had previously advised.
In January, Implats said its headline earnings per share for the half-year ended December 2005 were expected to be between 55% and 75% higher than for the previous comparable period.
The improved earnings were attributed to an increase in volumes sold, a rise in metal prices, particularly of platinum and rhodium, and a weakening of the average rand exchange rate from R6,21 to the dollar to R6,49 for the period under review.
The group doubled its interim dividend per share to R10 from five rand previously and declared a special dividend of R55.
Implats said it will be paying its shareholders a total of R4,3-billion through its interim and special dividends.
“The distribution of approximately R4,3-billion is in line with our stated philosophy of returning excess cash to shareholders and indicative of the company’s cash-generative ability going forward,” Implats CEO Keith Rumble said.
During the half-year, Implats increased its platinum output by 7%, or 938 000 ounces, from 880 000 oz in the previous period.
The group’s unit cost per platinum oz rose by 4,2% to R4 749 per oz from R4 557 per oz in the previous interim period. During the half-year, Implats saw a 6,5% wage increase at the major operating unit, Impala Platinum, where wages account for about 60% of costs, Implats said.
Implat’s interim margin increased from 42% to 33% before.
The group’s sales increased by 28% to R7,92-billion from R6,188-billion previously. Gross profit rose by 64% to R3,305-billion from R2,022-billion.
Profit for the period declined by 39,4% to R1,826-billion from R3,014-billion due to the R3,156-billion profit on the sale of Implat’s investment in Lonplats during the interim period to December 2004.
Interim earnings per share declined by 39% to R27,64, down from R45,29 previously also due to the Lonplats sale.
Cash at the end of December 2005 stood at R4,499-billion from R3,672-billion at the end of December 2004.
Turning to the outlook, Implats said it expects the platinum group metals market to remain robust.
The group also said it plans to continue to grow production at a rate of about 5% a year, with a target of 2,3-million oz by its 2010 financial year.
The group said it remains debt-free and highly cash generative.
“On the basis of current and expected exchange rates and metal prices, and excluding the impact of the black economic empowerment transaction but including the impact of secondary tax on companies on the special dividend, headline earnings for the full year are expected to be 20% to 30% higher than those for the last financial year,” Rumble said.
The prevailing I-Net Bridge consensus of analysts is for Implats to report headline earnings per share of R63,90 for the group’s 2006 financial year, up 62% from R43,25 in the company’s 2005 year. Analysts’ forecasts ranged from R48,02 to R75,12. — I-Net Bridge