Amplats feels the pain

Anglo American Platinum’s profits for the 2023 financial year fell by over 70% as platinum group metals (PGMs) prices plummeted.

In its full-year results released today, the mining giant said its performance was impacted by suppressed PGM prices, coupled with significant cost pressures and an uncertain outlook.

Net revenue fell to R124.58 billion compared to R164.09 billion in 2022.

The miner’s cost of sales increased significantly, from R93.58 billion to R103.57 billion.

This increase was largely a result of above-inflation energy costs, increased drilling activities, and higher labour and mechanical spare costs.

This saw the company make a profit of R18.11 billion for the year – far lower than the R66.77 billion made in 2022.

Amplats CEO Craig Miller said, “2023 was a challenging year, and I appreciate the hard work of the Anglo American Platinum team.” 

“The discipline of getting the basics right has helped us achieve a record safety performance and deliver stable production in the context of a difficult operating and macro-economic environment.” 

“We continue our work to set the business up to be sustainable for the long term, and that requires us to be disciplined, focused and decisive.”

Amplats’ refined production was 1% lower in 2023, primarily due to lower metal-in-concentrate production and the impact of Eskom’s load-curtailment of around 82,000 PGM ounces. 

However, Miller said this impact was offset by the release of concentrate stocks, and sales volumes increased by 2% due to the drawdown in refined stock.

Amplats’ realised dollar basket price fell by 35% in 2023 to $1,657 per PGM ounce – the lowest level since 2019. 

This reduction was predominately caused by a decline in palladium and rhodium metal prices, which decreased by 37% and 58%, respectively. 

EBITDA fell by 67% to R24 billion, with a mining EBITDA margin of 35%. Miller attributed this drop to the decrease in price combined with higher costs.

Amplats’ headline earnings for the year are R14 billion, 71% lower than the previous year. Basic earnings per share dropped to 4,953 cents per share, down over 70% from 2022. 

The company ended the year in a net cash position of R15 billion, including the customer prepayment of R11 billion.

Amplats declared a final 2023 dividend of R9.30 per share or R2.5 billion. This brings the total dividend declared for 2023 to R21.30/share or around R6 billion, equivalent to a 40% payout of headline earnings.