Anglo American Platinum, a South African precious-metals company, announced today that it anticipates a significant drop in both basic earnings and headline earnings for the first half of this year. The company attributes the decline to lower palladium prices impacting revenue, a weakened exchange rate, and a decrease in sales.
According to their projections, Anglo American Platinum expects headline earnings to range between ZAR6.7 billion and ZAR9.4 billion ($370.1 billion-$519.3 billion) compared to ZAR26.7 billion in the previous year. This translates to a decline in headline earnings per share, which are expected to be between 2,544 and 3,569 South African cents per share, down from 10,140 cents in the first half of 2021.
Furthermore, the company forecasts a decrease in basic earnings, from ZAR26.7 billion last year to an estimated range of ZAR6.6 billion and ZAR9.3 billion for the current period. Earnings per share are also projected to decline from 10,125 cents to between 2,506 cents and 3,531 cents.
The primary driving factor behind this downturn is the decline in average prices, particularly in rhodium and palladium which experienced drops of 47% and 29% respectively. Additionally, sales volumes from Anglo American Platinum’s own production, excluding trading, fell by 12% year-on-year due to lower refined production as a result of scheduled maintenance and asset integrity work.
Inflationary pressures and exchange-rate volatility have further contributed to increased mining and processing costs according to the company.
Considering these factors, Anglo American Platinum faces a challenging first half of 2022, with sharp declines in earnings as a result of various market conditions.