Northam Platinum reports record operating profit
BUSINESS LIVE / 22 FEBRUARY 2019 - 11:04 / ALLAN SECCOMBE
Northam, which is in the throes of a growth programme, withheld its dividend again, but reported sound results to underpin its strategy
Northam Platinum produced a strong set of interim results as operating profit trebled on the back of higher production and improved prices for the basket of metals it produced.
Paul Dunne. Picture: MARTIN RHODES
Northam, which is in the throes of a growth programme at its Booysendal assets and incurring hefty capital expenditure, withheld its dividend again, but reported sound results to underpin its strategy.
The bottom line profit line is distorted by a preference share scheme put in place when Northam introduced a 31.4% black ownership scheme that pumped more than R4bn onto its balance sheet.
Northam reported a post-tax loss of R64m for the six months to end-December, an improvement from the R284m loss a year earlier. Accounting for the nearly R620m related to dividend payments to the preference shares, Northam reported normalised headline earnings of R553m up from R189m.
Operating profit reached a record R1bn in the interim period, up from R339m in the same period a year earlier and more than 2018’s full-year operating profit of R823m.
Revenue increased by 48.6% to R4.98bn on the back of a 40% increase in metal sales as Northam supplemented mined production with stockpiled material to take advantage of higher prices.
Northam forecasts it will spend more than R2.3bn at its Zondereinde, Booysendal complex and Eland assets this year, with the biggest chunk of R1.5bn going towards Booysendal, a shallow, mechanised, low-cost operation near Steelpoort in Limpopo.
Northam has net debt of R2.9bn and intends reducing this by working through stockpiled material that has a sales value of R2.3bn.
Northam has to repay domestic medium-term notes of R1.25bn during the next six months.
Said CEO Paul Dunne in the results statement: “The group intends to refinance the domestic medium-term notes and to continuously review and optimise the quantum of its available debt facilities in view of the group’s increasing production profile and the impact thereof on working capital requirements and exposure to metal price fluctuations.”
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