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Amplats brings back dividend as net profit surges in FY'17

Anglo American Plc unit Anglo American Platinum Ltd., or Amplats, reinstated its dividend after six years, declaring a payout of 3.49 South African rand per share for 2017, following a surge of over 3x in net profit.

The company met the guidance for 2017 with a profit attributable to shareholders in 2017 of 1.94 billion rand, or 7.39 rand per share, compared to a profit of 632 million rand, or 2.40 rand apiece, a year earlier.

Amplats' headline earnings for the year were also within the guidance range, rising to 3.89 billion rand in the period from 1.87 billion rand in 2016.

Net sales revenue for the company increased to 65.67 billion rand from 61.96 billion rand in the prior year. A drop in sales revenue from platinum was offset by an increase in palladium sales.

Operating profit was up at 6.57 billion rand in the year, compared to 4.56 billion rand in 2016, according to the Feb. 19 release.

The company recorded a loss on impairment and scrapping of property, plant and equipment of 1.7 billion rand in 2017, and impairments of 1.91 billion rand on the Bafokeng-Rasimone platinum mine in South Africa, 777 million rand on non-current financial assets, and 235 million rand on Bokoni Platinum Holdings Pty. Ltd.

The impairments were partially offset by a 1.07 billion rand profit on disposal of long-dated resources and a 135 million rand profit on disposal of associates.

The company expects capital expenditure in 2018 of 4.7 billion rand to 5.2 billion rand, including 3.9 billion rand to 4.2 billion rand of sustaining CapEx.

In 2018, Amplats expects to produce 4.75 million to 5.0 million platinum group metals, or PGM, ounces, and 2.3 million ounces to 2.4 million ounces of platinum. The refined production and sales volumes are expected to be in line with production.

The unit costs in 2018 are expected between 19,600 rand and 20,200 rand per produced platinum ounce. In 2017, it stood at 19,203 rand, down 2% from the 2016 average.

The company's total PGM production in 2017 was up 1% year over year to 5 million ounces. Output of platinum, palladium and rhodium in the 12 months increased 8%, 14% and 2%, respectively, to 2.5 million ounces, 1.7 million ounces and 323,200 ounces.

Gold output was up 7% at 115,400 ounces, offset by a 12% decline in other PGM production to 497,300 ounces, on a yearly basis.