Amplats to Pay Dividend After 6-Year Hiatus

Anglo American Platinum’s (JSE:AMS) share price gained over 1.21 percent on Tuesday (February 20) as news of the company’s decision to revive its dividend reached the market.

The miner will pay 3.49 rand per share ($0.30) for H2 2017; it last paid a dividend in 2011.

Last year, the firm slashed its net debt by 75 percent from a year earlier through asset sales, achieving a third year of consecutive declines in its debt. Amplats’ debt now sits at 1.8 billion rand, and the company more than doubled its annual profit in 2017.

“We have delivered on our commitments of improving operational performance, repositioning the portfolio, ensuring industry-leading cost-control and through disciplined capital allocation,” said Amplats CEO Chris Griffith in a release detailing the company’s 2017 results.

Amplats generated $2.4 billion rand of free cashflow in 2017 and raised its platinum-group metals production by 1 percent. It increased production despite placing its Bokoni mine on care and maintenance, selling its Maseve mine and experiencing an unplanned work stoppage at Mototolo to complete remedial work on the tailings facility.

The company attributes the rise in platinum-group metals output to record production from its Mogalakwena and Unki mines as a result of improved operational efficiencies.

The firm also acknowledged that it needs to improve its safety performance following the death of six employees in work-related incidents last year.

Amplats added that the platinum market is likely to be in a small surplus again for 2018 as “gross automotive demand may decline with diesel engines’ share of new car sales in Europe set to fall, albeit at a lower rate than last.” Moving forward, the company plans to focus on improving its underlying cashflow and spending on “quick pay back projects.”

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.