Anglo American Platinum Ltd. said it will report a bigger-than-expected loss after the world’s largest producer of the metal reported impairments and write-offs amounting to 14 billion rand ($853 million).
The basic loss for 2015 will probably be 12.1 billion rand to 12.2 billion rand, compared with earnings of 624 million rand a year earlier, the Johannesburg-based company said in a statement Monday. The bulk of the loss is due to the carrying value of Amplats’s assets, it said. The producer said Dec. 8 that profit will be at least 20 percent lower than in 2014.
Post-tax restructuring costs of 850 million rand and implementing plans that led to a reduction in employees and contractors also contributed to the decline, Amplats said. The stock fell as much as 4.6 percent to 183.26 rand before rebounding 0.3 percent to 192.69 rand at 9:54 a.m. in Johannesburg.
“It’s certainly disappointing,” Rene Hochreiter, an analyst at Noah Capital Markets Pty Ltd. in Johannesburg with a buy rating on the stock, said by phone. “It will be very interesting to see if they made a profit from their cashflow from operations, which it sounds like they may not have.”
Platinum, used in automobiles’ catalytic converters to reduce emissions, has plunged 31 percent since the beginning of 2015 as part of the global rout in commodities. To cope with the downturn, investors have pumped 4 billion rand into Impala Platinum Holdings Ltd., the world’s second-biggest producer, and about $400 million into Lonmin Plc, the third-largest.
Amplats, 77 percent owned by Anglo American Plc, is instead selling assets. It agreed to sell three Rustenburg mines to Sibanye Gold Ltd. for at least 4.5 billion rand last year to focus on more mechanized operations.
Headline earnings will drop to a range of 0.25 rand to 0.55 rand a share from 3.01 rand a year earlier, Amplats said. Without one-time items such as writing off loans to Atlatsa Resources Corp. and an increase in inventories, headline earnings in the year ended 2015 would have improved by 4.12 rand a share, the company said.