[miningmx.com] — IMPALA Platinum (Implats) boosted headline earnings 63% to 345 cents per share and has increased its interim dividend declaration by 25% to 150c/share for the six months to December.
The sharply improved performance results from higher production at Implats’ flagship Rustenburg division and the Zimplats operation in Zimbabwe, as well as higher platinum group metal (pgm) prices.
The increase in earnings is despite the strengthening of the rand against the dollar, which firmed to an average rate of R7.16/US$1 for the six months (previous comparable period – R7.70/US$1).
According to Implats, the closing exchange rate of R6.62 compared to R7.39 at the end of December 2009 resulted in additional “foreign exchange transactional losses of R375m”.
The group said: “The combined effect of the stronger rand is equivalent to 185c per share after tax.’
Implats CEO David Brown said he expected “tight market conditions’ for both platinum and palladium, because of the growing influence of the emerging market economies combined with “challenging supply prospects’.
He added further favourable factors included the injection of further liquidity into the US economy and the containment of Europe’s debt problems.
Brown said the economic might of the developing world – particularly China – had seen platinum continue its recovery from the lows of 2008, despite a somewhat pedestrian recovery in Western world markets.
He said: “The market performance had more to do with a surge of money flowing into investment products such as the platinum ETFs (exchange-traded funds) – which grew by 550,000 ounces during the year following the launch of the US fund in January – and the paper markets which added about 600,000oz.
“From a physical demand perspective, the Chinese automotive market continued to cement its place as the world’s largest auto market with over 18 million vehicles sold in the year.
“However, the jewellery market consolidated somewhat after an extremely robust 2009 when inventories were replenished at significantly lower prices.’
Implats increased total production by 6% to 952,000oz for the six months and held unit cost increases to a 4% rise to R10,271/oz of platinum produced.
The writer owns shares in Impala Platinum.
