Write-offs knock Amplats profit

Anglo American Platinum has warned that its results for the year to December will be adversely affected by a R14 billion write off.

Johannesburg - Anglo American Platinum has warned that its results for the year to December will be adversely affected by a R14 billion write off.

On Monday, the listed platinum miner also told shareholders its earnings would be substantially lower than previously expected.

In the middle of last year, Amplats said it would halt expansion plans and was also set to retrench managers. It subsequently said it would sell its ailing Rustenburg mines to Sibanye Gold for R4.5 billion.

On December 8, it said headline earnings and earnings per share would drop by at least 20 percent when compared to the 2014 financial year.

This, it said, would result in R157 million being wiped off its headline earnings.

Basic earnings and basic earnings per share for the p2015 year were also expected to be at least 20 percent, or R125 million, lower than in 2014.

However, the company is now warning that headline earnings for the year is likely to decrease to between R60 million and R135 million, or between 92 percent and 83 percent lower than 2014.

Headline earnings per share are likely to drop by between 92 percent and 82 percent.

In 2014, the listed platinum miner reported headline earnings of R786 million, while headline earnings per share were 301c.

Basic earnings for the year are likely to decrease to between a loss of R12.1 billion and a loss of R12.2 billion, says Amplats.

This, it says, translates into a decline of between 2 039 percent and 2 055 percent when compared to the previous year.

The expected decrease in earnings and headline earnings, Amplats explains, is largely due to impairments and write-offs of the carrying value of assets of R14 billion, post-tax, with only R1.8 billion impacting headline earnings; restructuring costs amounting to R850 million, post-tax, due to reorganising the support and service functions to ensure a rightsized overhead structure to support a more focused business; and the implementation of operational plans which focus on the need to deliver positive cash flows and further increase efficiencies which ultimately led to a reduction in contractors and employees.

Excluding once-off items, the company’s headline earnings would have improved by 412 c a share, it says.

IOL