South Africa’s Anglo American Platinum (Amplats) is navigating significant financial challenges while keeping its ambitious restructuring program on track.
The company expects to complete its demerger from its parent company, London-listed Anglo American, next year and is planning a secondary listing in London, as announced by its CEO on Monday.
In its first-half results report, Amplats also revealed the reduction of approximately 3,700 jobs to cut costs in preparation for the demerger.
Sharp drop in earnings driven by multiple factors
Amplats reported that its earnings before interest, tax, depreciation, and amortisation (EBITDA) for the six months ending 30 June fell by 8% to R12.3 billion (£516 million).
Headline earnings saw an 18% decrease, landing at R6.5 billion (£273 million).
This decline in earnings was attributed to several factors including inflation, one-off restructuring costs, and a significant 24% drop in realised platinum group metals (PGM) dollar basket prices, which fell to $1,442 (£1,121).
Job cuts and cost-saving measures
In February, Amplats announced a series of cost-cutting measures aimed at saving R10 billion (£420 million) annually by the end of the year.
So far, the company has achieved savings of R4.7 billion (£197 million). As part of its restructuring, Amplats will be cutting 3,700 jobs.
To date, approximately 2,800 employees have left the company, with the remaining 25% expected to depart in the second half of the year.
The company is also considering further strategic moves, including a potential secondary listing in London.
Mixed performance in production and sales
The company experienced a 5% increase in refined PGM production, reaching 1.78 million ounces, while metal-in-concentrate production fell by 5% to 1.76 million ounces.
Sales volumes rose by 9%, primarily due to the drawdown of inventory.
Chief Executive Craig Miller emphasized the company’s focus on maintaining operational excellence and increasing productivity amidst challenging economic conditions and low PGM prices. He stated,
“We continue to focus on our strategic priority of going beyond resilience to thrive through change, as we navigate through an ever-evolving operating landscape.”
Future outlook for Anglo American Platinum
Anglo American’s controlling interest in Amplats is expected to be distributed to shareholders by the end of 2025.
Miller mentioned that the company is considering a possible secondary listing in London once the separation from Anglo American is complete.
Currently, Amplats is listed in Johannesburg, with Anglo American holding a 78% stake.
The company’s ability to maintain operational excellence and increase productivity amidst low PGM prices and challenging economic conditions will be critical in its journey towards independence and long-term success.
With substantial cost-saving measures, strategic workforce reductions, and a potential secondary listing in London, Amplats is positioning itself to thrive as an independent entity despite current financial challenges. As the company continues to focus on operational excellence and strategic priorities, it aims to navigate the evolving market landscape and secure a stable future.
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