Anglo American Platinum's 2017 Profit More Than Trebles, Declares Dividend -- Update
(Adds updates throughout.)
By Alexandra Wexler
JOHANNESBURG--Anglo American Platinum Ltd. (AMS.JO) declared a dividend for the first time in six years on Monday as profits more than tripled during 2017.
Better operational performance and strict cost management boosted earnings, the company said. Anglo Platinum's return of cash to shareholders is part of a larger, industry-wide turnaround after years of low prices led miners across the globe to slash debt and costs, while unloading less profitable assets.
"In 2012, with the platinum price at about $1,500 [an ounce], half of Anglo Platinum was loss making," Chief Executive Chris Griffith told The Wall Street Journal. Since then, the company has reduced its headcount by more than 20,000 people. "The company at $1,000 platinum is now substantially more profitable. It was very, very hard work," Mr. Griffith said.
Still, the company warned that metal-price volatility and a stronger South African Rand would create a challenging environment this year.
The Johannesburg-listed miner declared a final gross cash dividend of ZAR3.49 a share from profits accrued during the six months ended Dec. 31, the first time the company has declared a dividend since 2011.
For the full year, Anglo Platinum reported net profit of 1.94 billion South African rand ($166.9 million) from a profit of ZAR632 million during 2016, in line with the company's previously announced guidance.
That includes post-tax impairments of ZAR3.9billion, ZAR2.21 billion of which was booked in the company's first-half results, mostly related to disposals.
The miner said pretax profit for the year ended Dec. 31 rose to ZAR3.54 billion from ZAR1.06 billion in 2016.
Anglo Platinum, a majority-owned unit of globally diversified miner Anglo American PLC (AAL.LN), reported headline earnings, which strip out certain exceptional and one-off items, of ZAR3.89 billion for 2017, more than double the ZAR1.87 billion a year earlier, also in line with the company's guidance.
Anglo Platinum is reaping the benefits of years of restructuring, cost-cutting and asset sales. Earnings in 2015 were hurt by impairments and write-offs of ZAR14 billion after tax and restructuring costs. In 2016, the company returned to profit as a weaker rand and cost-improvement initiatives helped to offset the pressure of lower U.S. dollar metal prices.
Anglo Platinum has also slashed its debt. At Dec. 31, the company's net debt was ZAR1.8 billion, down from ZAR7.3 billion a year earlier. The company's average unit costs per ounce of platinum produced fell 1.7% to ZAR19,203 an ounce, while the dollar basket price improved 12% in 2017 to $1,966 an ounce.
Total platinum group of metals, which includes rhodium, platinum, palladium and other metals, production at the company rose 0.6% to 5.0 million ounces in the 12 months to Dec. 31. For 2017, the company reported net revenue of ZAR65.67 billion up 6% from the year ended Dec. 31, 2016.
Anglo Platinum shares on the Johannesburg Stock Exchange are up 5.1% over the last 12 months, while futures for the white metal are up 0.8% on the New York Mercantile Exchange's Comex division over the last year.
Write to Alexandra Wexler at Alexandra.Wexler@wsj.com
(MORE TO FOLLOW) Dow Jones Newswires
February 19, 2018 04:08 ET (09:08 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.