Impala Platinum Holdings (Implats) posted weaker half-year headline earnings per share on Thursday, and forecast ”very tight market conditions” for platinum due to a power crisis in South Africa that has helped push the metal’s price to an all-time record.
”South African supply constraints due to electric power… coupled with stable to firm automotive demand will result in very tight market conditions in 2008 for both platinum and rhodium,” Implats’s CEO David Brown said.
Mines in Africa’s biggest economy have been hit by a lack of power after state utility Eskom asked the mining sector to cut power consumption to 90% of their normal needs to ease a nationwide shortage caused by the failure of electricity generation to match economic growth.
Implats, the world’s second-biggest platinum producer, said production by the group was up 1,4% for the six months to end-December to a record of 1,03-million ounces of platinum due to a combination of improved production at its key Rustenburg mine, and the ongoing ramp-up in output at its other operations.
Sales for the period rose 9,8% to R16,32-billion from R14,86-billion in the year-ago period.
But Implats said headline EPS and EPS for the six months to December fell by 6,3% to 771 cents as a result of an increase in the shares issued by the company last year. Headline EPS, which is the key profit gauge in South Africa, strips out non-trading, capital and certain extraordinary items.
The group posted an increase of 7,3% in headline earnings to R4,66-billion during the six months.
Platinum, used in jewellery and auto catalysts, soared to record highs above $2 000 an ounce on Thursday as supply concerns lingered in South Africa, the world’s main producer. — Reuters