Implats Profit Drops 52% on Asset Writedowns and Cost Increases

Impala Platinum Holdings Ltd. (IMP) said profit declined 52 percent, missing estimates after the metal’s second-largest producer wrote down assets by 2.3 billion rand ($223 million) and costs rose by more than inflation.

Headline earnings per share, which exclude one-time items, were 3.30 rand for the year ended June, from 6.85 rand a year earlier, the Johannesburg-based company said today in a statement. The result compares with the median estimate for a profit of 3.39 rand in a survey of 19 analysts compiled by Bloomberg. The company declared a dividend of 60 cents a share.

Implats, as the company is known, operates the Rustenburg mine in South Africa, the world’s largest platinum operation. Producers in the country, which has the biggest reserves, are struggling with higher costs as strikes led to above-inflation wage gains and demand waned.

“The platinum industry is facing extremely tough times, with static platinum group metal basket prices, low productivity, cost pressures and industrial relations challenges” the company said.

Implats produced 1.58 million ounces of equivalent refined platinum, an increase of 9 percent from a year earlier. The metal slid 3.5 percent to average $1,549 an ounce in the year.

Implats made impairments of 1.3 billion rand on long-term receivables and a writedown of approximately 1 billion rand of goodwill from the African Platinum Plc acquisition concluded in the 2007 financial year.

To contact the reporter on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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