Amplats first-half earnings fall as pandemic and closure of processing facilities weigh

Anglo American Platinum (Amplats) reported on Monday a 7% fall in half-year profit, hurt by the impact of the new coronavirus on output and the temporary shutdown of its processing facilities.

The Johannesburg-listed miner, one of the world’s largest platinum producers, said headline earnings per share (HEPS) for the six months to June 30 fell to R26.27 per share compared with R28.15 a year earlier.

HEPS is the main profit measure used in South Africa that strips out certain once-off items.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose to R13.1 billion from R12.4 billion in the year ago period, driven by higher metals prices.

The precious metals producer said it expected output to improve in the second half of the year despite production of platinum group metals (PGM) down 25% year-on-year to 1.6 million ounces due to shutdowns in South Africa and Zimbabwe.

“We expect to see a stronger production performance in H2 2020, but caution that significant headwinds still exist,” said Amplats CEO Natascha Viljoen.

Viljoen, who was appointed CEO in April, said output capacity levels were around 80% by the end of June and expected it to increase to above 95% by the end of the year boosted by open-pit and mechanised mines.

“We expect a recovery in 2021, though ongoing social-distancing measures and the possibility of further COVID-19-related shutdowns means output is unlikely to return to its previous level, particularly from underground operations,” the company said.

Mining companies in South Africa are anxious about managing COVID-19 and preventing outbreaks at mine sites where workers are in close quarters and confined spaces.