Anglo American Platinum Ltd. (AMS), the world’s biggest producer of the metal, said first-half profit almost doubled from a year earlier after the rand weakened, curbing the impact of cost increases in South Africa.
Earnings per share excluding one-time items probably rose to a range of 4.80 rand ($0.50) to 5.35 rand in the six months through June compared with 2.73 rand a year earlier, the Johannesburg-based company said in a statement. The stock climbed as much as 2.6 percent, the most in a week.
The price of platinum declined 0.5 percent to an average $1,549 an ounce in the first half compared with a year earlier while the rand depreciated 14 percent against the dollar, making it the worst performer among 16 major currencies tracked by Bloomberg. The currency swing has helped Amplats, as the company is known, offset above-inflation gains in costs such as electricity and wages.
“The rand has obviously bailed these guys out quite a lot,” Justin Froneman, a Johannesburg-based analyst at Standard Bank Group Ltd.’s securities unit, who has a hold rating on the stock, said by phone. “The market was possibly anticipating slightly weaker results.”
The shares advanced as much as 2.6 percent after the announcement and traded 2 percent higher at 296.98 rand by 12:25 p.m. in Johannesburg, heading for the strongest closing level since June 19.
Basic earnings per share for the first half will probably increase to between 4.50 rand and 4.86 rand compared with a loss of 1.78 rand in the same period in 2012, Amplats said in the statement. The 2012 figure includes a one-time loss of 1.2 billion rand, or 4.55 rand per share, due to writing down uneconomic projects and assets.
“It’s difficult to get a read on what this means operationally as there are quite a lot of working-capital adjustments in the background that one needs to be aware of,” Froneman said.
Amplats will releases its full earnings report on or about July 22.
To contact the reporter on this story: Kevin Crowley in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: John Viljoen at email@example.com