Impala Platinum, the world’s second-largest platinum miner, announced that its earnings for the fiscal first half are expected to decrease by a greater extent than previously projected. The decline has been attributed to various factors including foreign-exchange pressures, impairments to property and equipment, and a cash impact resulting from the consolidation of Impala Bafokeng’s cost base.
The company now anticipates that its headline earnings for the six months ended December 31 will be between 2.5 billion and 3.5 billion South African rand ($132.3 million-$185.2 million), representing a decrease of 75% to 82%. In terms of earnings per share, Impala Platinum expects a drop of 76% to 83%, ranging from 279 cents to 391 cents per share.
Previously, the company had stated that it expected a minimum 20% decline in both headline earnings and earnings per share compared to the previous year’s figures of ZAR14.0 billion and 1,654 cents, respectively.
The significant decrease in earnings can be attributed primarily to lower revenue, which is a result of a 37% decline in achieved dollar revenue per ounce sold. However, this decline was partially offset by an 8% weaker rand. Impala Platinum reported a 12% increase in sales volumes, benefiting from the consolidation of Impala Bafokeng and improved operational momentum.
Overall, these financial results highlight the challenges faced by Impala Platinum during the first half of its fiscal year. The company will need to navigate the various factors affecting its earnings in order to regain profitability moving forward.
