Amplats forecasts nearly double first-half profit as rand weakens

 
Suzie Neuwirth
ANGLO American Platinum yesterday announced that it expects earnings to almost double when it releases its half-year results later this month.

The world’s largest metal producer – known as Amplats – said that earnings per share excluding one-off costs is expected to increase to between 4.80 rand (30p) and 5.35 rand for the six months to 30 June, compared to 2.73 rand year-on-year.

The Johannesburg-listed company said that the expected increase is attributable to a weaker average exchange rate of the rand against the dollar and higher sales volumes, although this is partially offset by higher costs and dwindling metal prices. The price of platinum declined 0.5 per cent to an average £1,026 an ounce in the first half compared to the previous year.

However, Espirito Santo put a sell recommendation on the stock, declaring it overvalued due to ongoing workforce negotiations in South Africa and the intervention of the government which forced them to scale back job cuts.

Next year’s elections will delay “a desperately needed improvement in government rhetoric, behaviour and attitude towards the mining industry”, the broker added. Shares closed 4.2 per cent higher at 303.50 rand (£20.30).