These results from Aquarius Platinum (AQP), the fourth largest platinum producer in the world, were never going to be good. Labour disputes, union turf wars, mine closures, regulatory issues and, most crucially, weak metal prices mean most South African platinum miners are lossmaking at the moment. Aquarius is no exception.
Still, headline losses of $61m (£39m) in the financial year represent an improvement over losses of $154m the year before. But impairment charges of $226m meant Aquarius' net loss ballooned to $288m, from $158m a year earlier.
The impairment charges reflect the closures of high-cost, lossmaking mines, which although painful have actually put Aquarius in a stronger position. Cash profits from mining increased to $70m this year from $29m in 2012. Importantly, a weak South African rand meant platinum group metal prices rose 7 per cent year on year, even though US dollar-denominated metal prices fell 6 per cent in the same period. The weaker local currency also helped lower cash costs by 15 per cent in rand terms.
Investec placed its earnings estimates for the current year under review following the results, which underperformed its forecasts materially. The broker previously forecast a return to profitable operations this year, albeit very modest profits.
AQUARIUS PLATINUM (AQP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 44p | MARKET VALUE: | £214m | |
| TOUCH: | 43-44p | 12-MONTH HIGH: | 76p | LOW: 34p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 60¢* | NET DEBT: | 65% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 311 | -97 | -13.3 | nil |
| 2010 | 472 | 58 | 6.1 | 6.00 |
| 2011 | 683 | 25 | -2.3 | 8.00 |
| 2012 | 486 | -189 | -33.8 | nil |
| 2013 | 371 | -332 | -61.1 | nil |
| % change | -24 | - | - | - |
*Includes intangible assets of $59m, or 12¢ a share £1=$1.55 | ||||
