Impala Platinum Profit Falls as Much as 79% as Costs Advance
Impala Platinum Ltd., the world’s second-biggest producer of the metal, said first-half profit probably fell as much as 79 percent because of a drop in output, rising costs and a writedown.
Earnings per share excluding one-time items were probably 1.20 rand to 1.38 rand in the six months through December compared with 5.73 rand a year earlier, the Johannesburg-based company said in a statement today. The median estimate of three analysts in Bloomberg survey was for 1.57 rand. Impala is recording a writedown of 603 million rand ($68 million).
Upheaval has plagued platinum and gold producers since August last year, when thousands of workers staged a series of illegal strikes, winning pay increases of as much as 22 percent. Adding to mining costs, Eskom Holdings Ltd., which supplies about 95 percent of South Africa’s power, is seeking 16 percent average annual tariff increases until 2018 to fund expansion. Inflation in Africa’s biggest economy was 5.7 percent in December.
The expected decline in earnings “is due to a decrease in mine-to-market throughput, above-inflation cost increases and the impairment of long-term receivables,” the company said.
Impala dropped 3.4 percent to 159.52 rand by 10:39 a.m. in Johannesburg, the lowest intraday level since Dec. 19.
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