Impala Platinum's Full-Year Profit Declines Less Than Analysts Forecast
Impala Platinum Holdings Ltd., the second-largest producer of the metal, reported fiscal full-year profit that fell less than analyst forecasts as a strike and its worst underground accident were countered by rising prices.
Earnings dropped to 7.85 rand ($1.07) a share in the year through June 30, from 10 rand a year earlier, the Johannesburg- based company said in a statement. Earnings excluding one-time items fell 21 percent to 7.86 rand a share, beating the median forecast of 7.59 rand among 11 analysts surveyed by Bloomberg.
Output of platinum and related metals rose 7.6 percent even after mining was halted by the strike and accident that killed nine workers in “one of the most difficult” years in Impala’s history, it said. Platinum prices in the rand rose by an average 7.9 percent. Chief Executive Officer David Brown said production at the Impala site may rise about 8 percent this fiscal year.
Impala, which raised its dividend 22 percent to 3.90 rand a share, climbed 6.50 rand, or 3.8 percent, to 177 rand by the close at 5 p.m. in Johannesburg. Anglo Platinum Ltd., the largest producer of the metal, advanced 4 percent.
Impala may boost output at its eponymous mine operations to about 940,000 ounces this fiscal year from 871,000 ounces last year, Brown said in an interview from Johannesburg today.
Impala is planning 20 billion rand of projects to help raise output to 2.1 million ounces of platinum a year by 2014 from 1.74 million ounces last year to take advantage of prices. The company may add to borrowings in two to three years, depending on exchange rates, Brown said. Impala will present a feasibility study on a proposed project at Afplats to the board in November, Brown told investors in Johannesburg today.
Platinum may trade between $1,500 and $1,600 an ounce in the next six to 12 months, he said. The price for immediate delivery was $1,534.50 by 11:04 a.m. in London. The market will probably remain in deficit for 2010, the company said.
Palladium may trade at between $450 and $500 an ounce, and rhodium at $1,900 to $2,150, Brown said.
In Zimbabwe, Impala’s Zimplats Holdings Ltd. began its $450 million Ngezi phase-two expansion project and plans to complete work by June 2014, Zimplats said in a separate statement today. The Zimbabwe unit posted a $122 million profit for the year through June compared with a loss of $25 million a year earlier.
Zimbabwe may curb demands that foreign companies hand over majority stakes in local units to black investors, instead asking them to sell 15 percent and invest in social programs, Chief Mining Commissioner Fredson Mabhena said July 26.
Impala paid the Zimbabwean government $23 million during the year under review, closing a tax dispute “as far as we’re concerned,” Brown said. Separately, the company is making slow progress in arranging the repayment of a $34 million advance made earlier to the government, he said.
Impala may pay a dividend of two-times cover for the 2011 financial year, Brown told analysts in Johannesburg today, adding the company will target a ratio closer to 1.4 times cover in following years.