11th Nov 2013 08:25
LONDON (Alliance News) - Lonmin PLC Monday said it swung to a pretax profit in its full year compared to a pretax loss in the previous year, as production got back on track.
The major Africa-focused platinum group metals producer posted a total pretax profit of USD140.0 million for the twelve months ended September 30, compared to a pretax loss of USD698.0 million the previous year.
The company said sales fell 5.8% to USD1.52 billion from USD1.61 billion but that its platinum sales volumes of 696,000 ounces exceeded the company's full-year guidance of 660,000 ounces.
Lonmin took far lower impairment costs in the recent year, at USD157.0 million versus USD726.0 million the previous year. The company started to recover from mine closures and disruptions in 2012, when the Marikana miners strike left 34 mineworkers dead. Police had opened fire on workers who were demonstrating against working conditions in South Africa.
The company had to stop operations for six weeks in 2012, which flatters the 2013 year-on-year comparisons for 2013.
Lonmin said it produced 6.4% more total platinum metals in concentrate at 198,428 ounces in the fourth quarter of 2013 compared to the third quarter, and mined 9.5% more attributable tonnes at 3.2 million tonnes in its fourth quarter compared to the immediately previous quarter.
The company also said its guidance for platinum sales in the just-started 2014 financial year is in excess of 750,000 ounces. Unit costs in the new year are expected to increase by less than the rate of inflation, and capital expenditure is expected at USD210 million.
Lonmin recognised the Association of Mineworkers and Construction Union as the biggest union at the company during the recent period, a significant development in the year-long trade union dispute in South Africa that has crippled mines and resulted in deaths of some miners.
Lonmin said that although it strives for a zero harm safety performance record, three employees died during the year as a result of ground falls at the company's operations.
Lonmin shares were up 6.1% to 348.20 pence, putting them top of the FTSE250 movers in early trading Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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