South Africa: Amplats Sees 2019 Headline Earnings Up By As Much As 150 Percent

analysis

It's a good time to be an Anglo American Platinum (Amplats) shareholder. The Anglo American unit has just issued a trading statement flagging stellar results as its turnaround gains momentum, boosted by robust prices.

Amplats expects its headline earnings and headline earnings per share for 2019 to rise between 131 and 151%, the company said in a trading statement on Tuesday 28 January. It said headline earnings were likely to fall between R17.545-billion and R19.055-billion. Its 2018 headline earnings amounted to R7.588-billion. Its results are still being finalised and will be released on 17 February.

This was not unexpected. The company said last week that platinum group metals (PGM) production was up 1% in 2019, but the devil is in the detail. Production at its cash-spinner, Mogalakwena, a mechanised, open-cast and relatively low-cost operation, rose 4%. But the real icing on the cake was prices. The rand basket price for the PGMs the company produces increased 38% in 2019, a trend that clearly flowed directly to the bottom line.

Palladium is the main driver on this front. Its price recently spiked to a record above $2,500 an ounce, bringing its gains over the past four years to around 500%. It...

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