LONMIN swung to a first-half profit after metal prices rebounded and costs fell, the miner said.
The platinum producer reported a pre-tax profit of $77m (£51m) for the six months ending in March. The figure beat most analysts’ expectations and compares with a loss of $196m for the same period last year.
The South African-based London-listed company did not declare an interim dividend yesterday, but said it hoped to pay out a final dividend following a rebound in the auto sector, which uses platinum for car catalysts which clean exhaust fumes.
Most investors welcomed the results, after years of big losses and missed targets.
“The big restructuring they went through last year is starting to pay off. This is a vastly different business from the one we were looking at two years ago,” said analyst Rebecca O’Dwyer at Investec Securities. “All for the positive.”
She added: “From a financial perspective it was a strong set of results. They came in well ahead of what we were forecasting.”
But other analysts weren’t so positive and said they were surprised that Lonmin went back to the equity markets to raise money only a year after it raised $457m in a rights issue.
“We view the production as a miss, the earnings as a hit and the placing as a disappointment,” said analyst Paul Galloway at Bernstein Research.
The price of platinum surged by nearly 50 per cent during Lonmin’s fiscal year.
FAST FACTS | LONMIN
● Lonmin has its primary listing on the LSE and has 22,000 full time employees.
● Its mining operations are in the Bushveld complex in South Africa and it currently sells of 682,955 ounces of platinum per year.