Northam Platinum reports comprehensive profit of R354 million - CNBC Africa

Northam Platinum reports comprehensive profit of R354 million

Earnings

by Trust Matsilele 0

Northam Platinum has realised comprehensive profit of R354 million.

The company also saw headline earnings per share rise from 25 cents in 2013 to 89.4 cents in 2014.

The group’s results of the six months ended 31 December 2014 attributed its higher earnings to the increased production volumes which had a positive influence on unit's cash costs.

(READ MORE: Northam Platinum’s 2014 FY performance dips)

Northam Platinum also said the improvement was a result of a generally higher South African rand basket price for the platinum group metals (3PGE + Au) due to a weaker ZAR/US$ exchange rate.

“Metal sales revenues for the group reached three billion rand for the period under review comparable to2.3 billion rand for the first half in 2014,” said the group.

[DATA NHM:Northam Platinum Limited] said this reflects the effect of the higher volumes combined with the rand weakening by 9.5 per cent year-on-year against the US dollar.

“The 10.5 per cent increase in group cost of sales to R2.6 billion mainly emanates from higher operating costs associated with the improved volumes, higher power costs and the higher price of labour, as well as higher purchases of concentrates from third parties which were up 9.6 per cent to 265.8 million rand.”

Northam said positively affecting the group's cost of sales, were lower charges for refining costs, at 100.9 million rand, resuming normal levels after having used outsourced smelting services in the previous comparable period.

“The 6.3 per cent drop in the depreciation charge to 210.0 million rand reflects the effect of the change in the group's depreciation calculation methodology to better match the rate of consumption of reserves, especially at the Booysendal mine.”

(READ MORE: S.Africa’s Northam platinum says wildcat strike hits Zondereinde mine)

The company said the outlook for metal prices remains subdued with some relief for South African producers coming from a weakening exchange rate.

The group added that the unstable supply of electricity by Eskom is also a major concern for maintaining the momentum of production.

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