Anglo American Platinum (Amplats) said on Monday it had delivered on its commitments to restructure its portfolio and reposition its business after disposing of four mines in the 2017 financial year ended 31 December.
Amplats said it had repositioned its portfolio with 70 percent of production in the first half of the cost curve after completing the disposal of Amandelbult mineral resources and a stake in Pandora joint-venture, completing disvestment in Union mine, and placing the loss-making Bokoni mine on care and maintenance.
The company’s 2017 objectives were to improve operational performance by shifting to own and operate the best, highest margin assets in the platinum group metals (PGM) mining industry; cutting loss-making production; and investing for the future.
As a result, total PGM production was up one percent with record breaking production from both the Mogalakwena and Unki mines despite the removal of loss-making production from Bokoni, the third-party purchase of concentrate from Maseve and the unplanned stoppage at Mototolo for remedial work on the tailings facility.
Amplats generated R2.4 billion of free cash flow from operations which, combined with sale proceeds from asset sales and the last tranche of a customer prepayment, contributed to a significant reduction of net debt to R1.8 billion from R7.3 billion.
The company reported a stronger earnings before interest, taxes, depreciation and armotization (EBITDA) of R12 billion, up 32 percent, and declared a final cash dividend of R3.49 per share, which is equivalent to a 30 percent headline earnings pay-out ratio.
Amplats chief executive Chris Griffith said the company’s persistent focus on value rather than volume over the past five years had resulted in it becoming a more efficient and more competitive business, generating better returns.
“Anglo American Platinum is now a fundamentally different business. We have seen our productivity increase by 58 percent since 2012, and now have 70 percent of our production in the first half of the cost curve and generated an EBITDA margin and ROCE [return on capital employed] of 18 percent respectively,” Griffith said.
“Looking forward, our focus will continue to be on operational excellence, and strengthening the underlying cash generation of the business. We will maintain strict capital allocation discipline, while considering value-enhancing, quick payback projects, and continue to progress the project studies at our world-class assets.”
– African News Agency (ANA)