Amplats half-year earnings to be hampered by tax impairments

Anglo American Platinum (Amplats) said on Tuesday that headline earnings and headlines earnings per share (HEPS) for the the six months ended 30 June were likely to decrease even further.

Amplats said headline earnings and HEPS were likely to decrease to between R550 million and R875 million and to between 210 cents and 335 cents per share, or between 67 percent and 47 percent lower, than the prior year’s restated figure of 629 cents respectively.

Last month, Amplats said headline earnings and HEPS for six months ended 30 June would be at least 20 percent lower than the comparative period at R329 million and R308 million, meaning the decline would be between 126 and 118 cents per share, respectively.

Amplats said the expected decrease in headline earnings and basic earnings was primarily a result of attributable post-tax impairments totalling R2.2 billion impacting basic earnings of which R0.3 billion impacts both basic and headline earnings.

The impairments that impacted only basic earnings included Union mine of R0.9 billion, consequent on the signature of agreements to sell the company’s interest in Union and shareholding in Masa Chrome, equity interests in Bafokeng Rasimone Platinum mine (BRPM) of R950 million and Bokoni Platinum Holdings of R45 million.

The impairments that impacted basic and headline earnings include the write down of a term loan to Atlatsa and a loan to the Bakgatla Ba-Kgafela Community related to their interest in Union.

In addition, Amplats said expected headline and basic earnings were lower due to a significant strengthening of the rand in the first half of 2017 compared to the first half of 2016, as well as lower sales volumes. Sales volumes were impacted by refined production.

Amplats will release the results for the six months ended 30 June next week.