Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Impala Platinum Profit Falls as Much as 79% as Costs Advance

Don't Miss Out —
Follow us on:

Feb. 11 (Bloomberg) -- Impala Platinum Ltd., the second-biggest producer of the metal, said profit probably fell as much as 79 percent in the first half 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 South African platinum and gold producers since last August, when thousands of workers staged a series of illegal strikes, winning pay increases of as much as 22 percent. Adding to wage costs, Eskom Holdings Ltd., which supplies about 95 percent of the country’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 forecast 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.

That impairment probably relates to money owed to the company by Zimbabwean government, Justin Froneman, an analyst at SBG Securities Ltd. in Johannesburg, wrote in a note to clients today.

‘Positive Surprise’

Impala agreed to sell a controlling stake in its Zimbabwean platinum unit under a law that hands ownership of mining assets to black citizens, the unit, known as Zimplats, said in a Jan. 11 statement.

Impala dropped 1 percent to 163.5 rand by the close in Johannesburg, the lowest closing level this month. With the one-time charge stripped out, Impala’s forecast is for better earnings than SBG expected, Froneman said.

“We consider the trading update a positive surprise and attribute the noted difference to our overly punitive measures of Implats mine-to-market production for the period under review,” he wrote.

To contact the reporter on this story: Ana Monteiro in Johannesburg at amonteiro4@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net; Amanda Jordan at ajordan11@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.