Johannesburg — PLATINUM miner Lonmin reported a loss in the year to September, dragged down by a slump in the precious metal prices, higher costs and lower production output.

CEO Ian Farmer said yesterday the company would not be paying a dividend for the second successive year because of the poor performance and as management was focused on improving the miner's financial health.

Farmer said the company had struggled with lower platinum prices, weaker production and higher costs, but expected demand and restructuring to help it to rebound from next year onwards. "There is much to be done before the operational health of Lonmin is fully restored," Farmer said. "The rand platinum group metals basket price throughout this year continued to squeeze industry profitability and cash flow, restricting capital investment."

Lonmin, the world's third- largest platinum producer, reported yesterday a net loss of 323m from a 566m profit recorded last year.

It suffered a pretax loss of 272m for the year compared with a profit of 779m last year, as revenues fell 52% to 1,062m from 2,231m.

It posted an underlying loss per share -- which excludes one- off items and foreign exchange movements on taxes -- of 59c for the year, compared with earnings per share of 336c last year. This followed Lonmin producing 682955oz of platinum during the period, which was 2% below its initial forecast.

"We are satisfied with our performance given the unfavourable market conditions during the financial year. We have met our targets, and operational performance is now heading in the right direction," Farmer said.

Platinum prices fell to below 1000/oz towards the end of last year due to the global downturn after hitting highs of more than 2000/oz earlier. The steep decline in platinum group of metals prices was partly a result of a deterioration in demand from the vehicle manufacturing sector during the period, worsened by manufacturers destocking because of the downturn.

"Our focus next year and beyond is on completing the restoration of the operational health of the business, growing our unit throughput and, through this, improving our position on the cost curve," Farmer said. He said a major restructuring of the company's operations, which included the closure of unprofitable operations, had been completed and was expected to result in yearly cost-savings of 90m.

Lonmin will gradually boost annual output up to 850000oz of platinum from 2013 to meet expected future demand, which will require "a substantial" amount of capital expenditure. The company has targeted output to be 700000oz next year.