Anglo American Platinum returned staggering dividends to shareholders in the first half of the year as the company drove the wave with high land prices seeing earnings.
The diversified product manufacturer reported a record R46.4 billion in dividends on Monday, amounting to R175 per share as a 100% payout ratio of main income.
Delivering what she called ‘industry-leading returns’ CEO Natascha Viljoen said the company was in a “strong financial position” at R57.6 billion in net cash.
Despite the threat of Covid-19 on the company, the total production of platinum metal groups increased by 28%, with strong performance from the company’s own managed operations, with a record income For interest, taxes, depreciation and amortization of R63 billion . The company’s share price soared to as much as 6% after the release of the results, hovering around R1.820 in morning trading.
The strong metal prices are not the only foundation that is ringing the coffers of the mining house, the favorable rand-dollar rate has also been on their side, with the rand basket up 29%.
“Looking at the value distribution to other stakeholders, our strong balance sheet, robust market outlook and confidence in the underlying cash generation of the business, we have declared dividends from the first half, consisting of both a basic dividend and a special dividend, amounting to R46.4 billion. , R175 per share as a payout ratio of 100% of main income, “said Viljoen.
Investors would not be the only stakeholders to reap the benefits of the fate of mining companies, with the government benefiting from higher tax revenues with Anglo Platinum paying R16.6 billion to the tax authorities through taxes and royalties in the meantime. Other mining companies are set to report higher returns to the tax authorities, which will further highlight the importance of the sector for the sick economy.
Anglo American Platinum’s refined production increased by 128%, due to proven operational stability as the company’s Rustenburg processing plant, which spent most of 2020, suffered intermittent losses back to commission.
The firm’s sales performance was higher than refined production, as sales volumes of current production were supplemented by a drawdown in refined metal inventory.
Viljoen stated that unit cost performance was affected by “inflation cost increases above CPI, in utilities and consumables, which we mark as a continuing risk in the second half.”
“Overall, however, we have seen strong earnings, we have a strong balance sheet with net cash of R57.6 billion, while our return on fixed capital increased to 207%.”
The flagship Mogalakwena mine in Limpopo produced 637,400 PGM ounces, 14% higher than in the first half of 2020. The increase was due to an increase in the flow of concentrator, as well as to operations returning from impact of Covid-19 in the corresponding period in 2020.
Production from Unki mine in Zimbabwe increased by 23% to 98,900 PGM ounces, from 80,300 PGM ounces in the first quarter of 2020, and it is said that the mine did not suffer from Covid-19.