Anglo Platinum, the world’s biggest platinum producer, reported higher headline earnings but flagged up cost pressures as it axed its final dividend and said it may cut jobs if platinum prices fall further.
South Africa’s AngloPlat, which is majority owned by global miner Anglo American, said it produced 2,39-million ounces of refined platinum in 2008, marginally below its target of 2,4-million.
While higher metal prices in the first half, a weaker rand versus the US dollar and lower tax boosted headline 2008 EPS by 7% to R56,09, operating profit fell 5% to R17,7-billion due to higher costs and lower sales.
”The operating profit didn’t look great — costs are up, grades are down,” said one platinum analyst based in Johannesburg.
Given the financial crisis, which has seen platinum prices tumble in recent months as the global economic slowdown intensifies, AngloPlat said it would not pay a final ordinary dividend.
”I think they are not paying the dividend because it would put pressure on their balance sheet, and they have said they are in a cash-conservation mode,” Barend Ritter, a Cape Town-based platinum analyst at Sanlam Investment Management said.
AngloPlat slashed its capital expenditure plans in December in response to a sharp drop in demand and in metal prices. It said on Monday it would also need to trim production costs to maintain margins by adjusting stock levels and reducing wastage.. — Reuters