Amplats under the pump

Despite cutting around 3,000 jobs in South Africa and implementing various other cost-cutting initiatives, Anglo American Platinum (Amplats) saw its 2024 profit fall by 45%.

Amplats said in its latest results, released on Monday, 17 February, that weak platinum group metal (PGM) prices weighed on its performance.

PGM prices have struggled significantly over the past year, and Amplats has initiated several efforts to combat this.

The miner implemented severe cost-cutting measures, including restructuring its South African operations, which resulted in the loss of at least 2,800 jobs.

This, along with other measures, led to R12 billion of annual cost savings for the company, significantly exceeding its 2024 target of R10 billion.

In addition, the miner decreased its unit cost decreased by 2% to R17,540 per PGM ounce, which it said more than offsett the 11% decline in own-mined production and inflation.

The miner also increased its refined PGM production by 3% to 3.9 million ounces by drawing down work-in-progress inventory built up from prior years.

Amplats’ sales volumes also grew by 4% to 4.1 million ounces.

However, despite all of these efforts, the miner’s revenue dropped by 12.52% to R109.01 billion.

The company’s EBITDA slumped by 19% to R19.8 billion. Amplats CEO Craig Miller attributed this to several factors, including –

• A 13% decline in the realised rand PGM basket price
• R3.5 billion of non-recurring costs owing to the miner’s recent operational and corporate restructuring
• Amplats’ demerger from Anglo American, set to be completed in June 2025
• Losses from associates

This translated to basic earnings of 2,683 cents per share, a 45.83% decrease from 2023.

The miner’s profit for the year also fell by 45% to R7.39 billion.

“Our decisive action plan exceeded our targets and generated cash, even at this low point in the PGM price cycle,” Miller said. 

He said the miner’s capital and cost reduction initiatives achieved around R12 billion of annual savings, while still maintaining spend at a level that ensures the prioritisation of both asset integrity and reliability. 

“As we prepare for our transition to a standalone organisation in 2025, our resilient performance amidst tough conditions through the past year underscores our readiness,” he said. 

“The demerger from Anglo American is planned to be completed in June 2025. As a

result, we will be a more focused, competitive and independent business, continuing as a leader in the PGM industry.” 

Miller also reaffirmed the company’s commitment to Southern Africa, saying that Amplats will retain its primary listing on the JSE.

However, the company will also attain a secondary listing on the London Stock Exchange, planned around the time of the demerger.

“This will help enhance our share trading liquidity and support our global shareholder base,” Miller explained.

“We have worked with Anglo American to ensure that we have all the capabilities in place as a fully independent company, and we are reaching a successful conclusion to that process.”

Amplats’ board declared a final dividend of R3 per share, and the company announced an additional cash dividend of R59 per share to all shareholders that will be paid ahead of the demerger.