Amplats to Post Loss After South African Strikes Hit Output
Anglo American Platinum Ltd. (AMS), the biggest producer of the metal, said it expects to show a loss for 2012 after strikes disrupted its mines in South Africa.
Amplats, as the Johannesburg-based company is known, said the loss may be 24.87 rand to 26.24 rand on a basic earnings- per-share basis, compared with a profit of 13.74 rand the previous year. Amplats wrote down 6.6 billion rand ($760 million) in the carry-value of assets and projects “not in use,” and which are considered not economically viable in the current market environment, it said in a statement.
The shares declined as much as 3.4 percent after the announcement, the biggest intraday fall since Oct. 29. It traded down 2 percent at 490 rand by 11:39 a.m.
Amplats was one of several South Africa miners to be hit by a wave of strikes in 2012 as workers demanded higher pay. The company said earlier today that the two-month “illegal action” drove platinum sales down for the period. Walkouts at the company’s Rustenburg, Union and Amandelbult operations cut output by 306,000 ounces, it said.
“We remain concerned regarding the company’s ability to initiate operational changes given the current South African social and political environment,” said Justin Froneman, an analyst at SBG Securities, in a note to clients today. The Johannesburg-based brokerage has a sell recommendation on Amplats, with an price target of 435 rand.
South African gold, iron-ore and coal mines were also halted by a wave of unauthorized strikes after Lonmin Plc (LMI) agreed in September to award pay increases of 11 percent to 22 percent.
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