[miningmx.com] — THE weaker earnings guidance from Anglo
American’s listed subsidiaries – Anglo American Platinum (Amplats) and Kumba Iron
Ore – is a pointer to a likely trend in results from other listed mining companies, as
metal and mineral prices have trended lower for a large part of the first six months
of 2012, according to a client note issued by RBC Capital Markets.
The firm forecasts, however, some improvement in second-half prices which, if
achieved, should result in better top-line revenue – although costs will remain a key
impediment.
Amplats said last week it expected its interim earnings to be lower by more than
20%. Similarly, Kumba said its earnings would be down from R28.20 per share to
R23.40.
“Not surprisingly, Anglo American subsidiaries Anglo Platinum and Kumba have
guided to lower earnings for the six months to end-June 2012 as a result of lower
commodity prices and, in the case of AngloPlat [Amplats], lower sales,’ said RBC
Capital analyst Des Kilalea. “This guidance is close to our numbers, and we are in
the process of refining our forecasts ahead of Anglo’s Q2/12 production update on
July 20.
“Our forecasts see some improvement in some H2 prices which, if achieved, should
result in better top-line revenue but costs will remain a key impediment, particularly
for AngloPlat, despite some assistance from a weaker South African rand.’
