Amplats posts mixed results as local job cuts loom
23 Jul 2024
The Amplats interim results for 2024, revealed a mixed performance in a severely challenged PGM market. The company reported a decline in earnings, primarily due to lower PGM prices and rising costs. However, Amplats remains optimistic about the long-term demand for PGMs, driven by their crucial role in green technologies such as fuel cells and emissions control.
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Amplats faced operational headwinds, including safety stoppages and equipment failures, which impacted production. To address these challenges and adapt to the low PGM price environment, the company has embarked on a restructuring plan aimed at improving operational efficiency and reducing costs.
This plan includes a significant reduction in its workforce, with approximately 3,700 jobs expected to be cut across its South African operations. The company has also initiated a review of its contractor base, which could lead to further job losses.
In response to these challenges, Amplats CEO Craig Miller explained that "the company responded decisively to an uncertain macro-economic and a low PGM price cycle by restructuring the business in pursuit of operational excellence, increased levels of productivity as well as ensuring cash-generation capabilities (value over volume), while maintaining the future growth optionality of our operations (pathways to value)."
Despite the difficult restructuring process, Amplats remains committed to its environmental, social, and governance (ESG) goals.
The company has made progress in reducing its carbon footprint and water usage, and it continues to invest in community development programs.
Value for all stakeholders
"During this period, we established programmes to help our people through this difficult restructuring process, as well as a comprehensive social impact mitigation programme, including community initiatives around our operations," said Miller in the results statement.
Amplats remains optimistic about the future demand for PGMs, particularly in the context of the global transition to a greener economy.
The company is also progressing with its planned demerger from Anglo American, which is expected to be completed by the end of 2025.
This move is expected to create a more focused and agile PGM company, better positioned to capitalise on emerging opportunities in the market.
"The opportunities before us as a stand-alone company are both numerous and exciting," remarked Miller.
The planned demerger from Anglo American will create a more focused, independent global leader in the PGM industry, with the scale and robust foundations to maximise the potential from our outstanding business, assets, and people
Key financial highlights
Headline earnings: R6.5bn, down 18% from H1 2023
EBITDA: R12.3bn, down 8% from H1 2023
Dividend: R9.75 per share, a 40% payout of headline earnings
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