BEE drags Northam to a loss

Northam will report a loss of between 264.06c a share and 265.54c a share in the year to June because of once-off BEE costs.

Johannesburg - Northam Platinum will report a loss of between 264.06c a share and 265.54c a share in the year to June because of once-off costs associated with its empowerment deal.

Northam recently entered into an empowerment deal with Zambezi Platinum - headed up by mining stalwart Lazarus Zim - which saw Zambezi take up 35.4% of Northam in its R6.6 billion empowerment deal. Zambezi is locked into the deal for a decade.

Northam’s empowerment transaction stake is a lot higher than the industry average and government requirement of 26 percent.

However, the deal attracts a once-off accounting charge, which will lead Northam to make a loss.

This is because the BEE deal also included a R400 million once-off lock-in and restraint payment for Northam’s BEE partners, which is a non-recurring expense and will be fully accounted for in year-end results.

Northam says its loss per share for the year is estimated to range between a loss of 264.06c a share and 265.54c a share, compared to the earnings of 2.4c a year ago.

Its headline loss per share - seen as a key indicator of performance i should come in at between a loss of 202.7c a share and 203.1c a share compared with a gain of 2.2c a share a year ago.

Zambezi also plans to help Northam make acquisitions and expand its operations and has injected R4 billion into Northam as part of the deal for that purpose. The deal led to Zambezi listing separately on the JSE earlier this year.

Northam says the anticipated loss is not a reflection of the performance of its operating assets, all of which performed satisfactorily during the year.

“The Booysendal mine is continuing to ramp up to full production and has contributed positively.”

Northam’s results will be published on Thursday.

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