Amplats cuts dividend payout again as South African power outages crimp profit

Dishaba platinum mine in Limpopo province, South Africa. (Image courtesy of Anglo American Platinum.)

Anglo American Platinum Ltd., the world’s biggest platinum miner by market value, cut its dividend payout as worsening power outages in South Africa curb production and profit.

The Anglo American Plc unit reduced its total 2022 payout by 62% as state-owned utility Eskom Holdings SOC Ltd. struggles to keep its coal-fired power plants working. To minimize the risk of a total grid collapse, Amplats is receiving more requests to curtail its power usage, Chief Executive Officer Natascha Viljoen said on a conference call. South Africa is the world’s No. 1 platinum producer.

“This financial year has seen us navigate a complex operating environment, with macro-economic challenges, supply chain disruptions, socio-economic unrest and electricity load-curtailment, as well as some operational headwinds of our own,” Viljoen said in a statement on Monday.

Johannesburg-based Amplats will pay 30 billion rand ($1.66 billion) to investors after profit before some one-time items — known as headline earnings — dropped 38% last year. The payout slumped to 115 rand per share, from 300 rand the previous year.

The payout is below a Bloomberg consensus of 149.28 per share and “will come as a disappointment to the market,” RMB Morgan Stanley analysts, including Christopher Nicholson, said in a note. Amplats shares fell as much as 5.2% in Johannesburg, before trading down 2.9% as of 1:13 p.m. local time.

Amplats full-year dividend was 62% of headline earnings, and the company can maintain payouts at a minimum of 40%, despite the challenges, Chief Financial Officer Craig Miller said.

“We’ve got a very solid balance sheet to be able to withstand some of these challenges and continue to invest in the business to maintain our asset integrity,” the CFO said on a conference call.

Viljoen, who last week announced she would be joining Newmont Corp. as chief operating officer in 12 months, said she will be closely involved in finding her successor.

“I’m not going to just walk away and not be responsible in how I leave and making sure that we find the best successor that we can,” Viljoen said in an interview. It was “hard to just walk away without considering” the offer from the world’s No. 1 gold miner, she added.

(By Felix Njini)


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