Northam Platinum surprises with heavy hit to interim earnings

NORTHAM Platinum Holdings said headline share earnings would fall between 45% to 55% for the six months ended December, coming in at between R0.55 and 0.67/share.The guidance is a bit of head scratcher for RMB Morgan Stanley as it undershoots its estimates and market consensus by a span. S&P Global’s Visible Alpha consensus on Northam’s headline earnings was R3.80/share.Northam’s net debt doubled year-on-year to about R6bn as of December 31.Revenue was lower than expected while cost of sales of R13.4bn for the six months period was 6.9% year-on-year. Unit costs came in as expected.“We will need to wait for results of 28 February to fully understand this delta, given both that unit costs are broadly in-line with MSe (Morgan Stanley estimates) and it appears to have flowed through to the cash flow statement so is unlikely to be primarily driven by depreciation or inventory movements,” the banks said.Shares in Northam edged down about 3.5% in early Johannesburg trade on Thursday.The miner reported an increase in inventory to 529,800 oz from 475,400 oz as of end June owing to a furnace rebuild which would also result in “lop-sided” production. Equivalent refined metal for the six months totalled 451,213 oz 4E, an increase of 3.7% over the six months of the previous financial year (2024:434,977 oz).The majority of the (unchanged) guidance of equivalent refined metal of between 980,000 to 1,02 million oz would be delivered in the second half of the year.Commenting in a trading statement on Wednesday, Northam CEO Paul Dunne was true to recent form saying the short-term outlook for the platinum group metal sector was grim. He said metal prices had “constrained earnings across the entire PGM sector.“The sector’s ability to respond to lower PGM prices by suspending or reducing costs is limited, as the majority of mining costs are fixed in nature. This is consequently constraining cash generation across the sector, requiring ever more prudent management of liquidity,” he said.What was new is that he alluded to “a raft of global geopolitical and macro-economic issues have the potential to cause further disruption to the PGM markets and metal prices”. Steel tariffs imposed by US president Donald Trump could crimp automotive production which would, in turn, add pressure on PGM demand in autocatalysis.Last year, Northam increased total liquidity to R12.3bn after increasing its revolving credit facility R1.3bn to R11.3bn.The post Northam Platinum surprises with heavy hit to interim earnings appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.comWeiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com