Anglo American Platinum, one of the world’s largest producers of platinum group metals (PGMs), is bracing for a significant earnings decline for the year ended 31 December 2024.
By Ryan Chigoche
The company attributes this downturn to falling PGM prices and operational disruptions, reflecting the broader challenges facing the industry.
Both headline earnings per share (HEPS) and basic earnings per share (EPS) are expected to experience substantial declines.
The PGM mining group expects headline earnings to decrease by 36% to 46%, falling to between R7.6 billion and R9.0 billion from R14 billion in 2023. HEPS is projected to decline to between 2,889 cents and 3,421 cents per share, down from 5,330 cents per share in the previous period.
Basic earnings are expected to decline by 42% to 52%, ranging between R6.3 billion and R7.6 billion, compared to R13 billion in 2023. EPS is forecast to drop to between 2,395 cents and 2,889 cents per share, from 4,952 cents per share in the prior year.
The primary factor behind this downturn is a 13% drop in realized ZAR PGM prices, with palladium and rhodium prices plummeting by 24% and 30%, respectively, in US dollar terms. Weak global demand, particularly in the automotive sector where PGMs are used in catalytic converters has exacerbated the decline.
“The decrease in earnings compared to 2023 is primarily due to a 13% decline in realized ZAR PGM prices,” the company stated in a trading update.
Beyond weaker metal prices, Anglo American Platinum incurred non-recurring costs totalling R3.5 billion, linked to operational and corporate restructuring, the demerger of its PGM business, and associate losses.
A further R1.9 billion asset write-down, mainly related to coarse particle recovery technology at the Mogalakwena mine, also weighed on earnings. These one-off costs reduced EPS and HEPS by approximately 1,700 cents and 1,100 cents per share, respectively.
Taxation and royalty payments also declined in line with lower profits, reflecting the tough operating environment.
Anglo American Platinum’s Zimbabwean subsidiary, Zimplats, reported a 7% drop in production, attributed to power outages and declining ore grades.
The challenges faced by Anglo-American Platinum and Zimplats reflect broader struggles across the PGM industry.
Weak metal prices, sluggish demand, and oversupply have eroded profitability while rising operational costs further squeeze margins.
The growing adoption of electric vehicles (EVs), which do not require catalytic converters, poses a long-term threat to PGM demand.
While PGMs remain essential for internal combustion engine vehicles, the global push for decarbonization could lead to structural declines in demand over the coming decades.
Despite these headwinds, Anglo American Platinum remains committed to operational efficiency and portfolio optimization. The company aims to unlock value from its resource base, enhance efficiency, and position itself for long-term growth. However, navigating the current volatile market will require strategic adjustments.
