Lonmin 's (LMI) share price briefly surged after it accompanied its full-year figures with news of a heavily discounted $407m (£264m) rights issue. Given the South African platinum miner has had to contend with weakening spot prices and the threat of further industrial action, its performance hasn't been quite as ghastly as the reported figures might suggest. The bulk of the $2bn operating loss relates to impairments linked to revised assumptions on platinum prices. And while an underlying operating loss of $134m is hardly anything to crow about, it needs to be set in context against a 29 per cent contraction in spot prices through the year.
To counter the price falls, the group brought both unit cash costs and capital expenditure well within its original guidance. Although management believes the platinum market is essentially oversold, it is tailoring the group's cost base in anticipation of prolonged pricing weakness. The miner is moving ahead with plans to mothball several mine shafts, and it has already shed around half of the 6,000 jobs it announced were going back in July. The group is also committed to further mechanisation within its pits; hardly surprising given that nearly all its operations are concentrated in the strike-prone Rustenburg area.
| LONMIN (LMI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 18p | MARKET VALUE: | £106m | |
| TOUCH: | 17.5-18p | 12-MONTH HIGH: | 197p | LOW: 15p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 278p | NET DEBT: | 12% | |
| Year to 30 Sep | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 2.00 | 0.29 | 71.0 | 15.0 |
| 2012 | 1.60 | -0.70 | -108 | nil |
| 2013 | 1.50 | 0.14 | 31.0 | nil |
| 2014 | 0.97 | -0.33 | -33 | nil |
| 2015 | 1.29 | -2.26 | -286 | nil |
| % change | +34 | - | - | - |
