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Impala Platinum Holdings Swings to Loss in First Half -- Update

23 Feb 2017 5:49 am
 
   By Alexandra Wexler 
 

JOHANNESBURG--South African miner Impala Platinum Holdings Ltd. (IMP.JO) swung to a first half loss from a year-earlier profit, due to low platinum prices, a poor safety performance and other operational challenges.

The world's second-largest producer of platinum said it swung to a loss of 371 million South African rand ($28.5 million) from a year-earlier profit of ZAR204 million, in line with the company's guidance.

It is the latest sign that despite huge efforts by South African platinum producers to cut costs and pump out more metal, profitability remains elusive as prices for platinum stay at historical lows.

Revenue for the period rose 8.3% to ZAR18.2 billion, as gross group refined platinum production increased 13% to 778,500 ounces. The company's headline loss, which strips out certain one-time items, came in at 71 rand cents a share, compared with year-earlier earnings of 53 rand cents a share.

In late 2015, Implats raised ZAR4 billion through a stock sale to bolster its finances, as it was battered by tumbling platinum prices and had to shoulder costs of ramping up South African output after a five-month strike in 2014. Implats, like other South African platinum miners, is still struggling to recover from the strike, which hurt production and profits at a time when prices for the precious metal were already low. Implats hasn't declared a dividend since fiscal 2013.

Global prices for platinum, which is used mainly to make car-exhaust filters and jewelry, have risen 11% since the start of the year, while Implats shares are up 15% over the same period. Over the past 12 months, platinum has risen 6.3%, while Implats shares have gained 45%.

Despite benefits from a weaker South African currency and a rise in platinum futures prices, overall metal prices continue to present a challenge for the company, which operates in South Africa and Zimbabwe.

"Despite a more positive market outlook, the operating environment in southern Africa remains fluid and challenging, particularly at the more labor-intensive South African mines where safety challenges and community disruptions continue to impede optimum performance," the company said in a statement. At the company's Rustenburg operations in South Africa, four employees suffered fatal injuries during the six months ended Dec. 31.

Implats' group unit cost per platinum ounce fell 2.6% in dollar terms to $1,623 an ounce, while revenue per platinum ounce sold rose 8.5% to $1,775. But still, the average price Implats received for its platinum rose 4.8% to just $1,009 an ounce.
 

Write to Alexandra Wexler at alexandra.wexler@wsj.com
 

(END) Dow Jones Newswires

February 23, 2017 00:49 ET (05:49 GMT)

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