News Column

Revenue falls at Aquariusas strike hits price

April 30, 2014

AQUARIUS Platinum Ltd, the world's fourth-largest platinum miner, reported a fall in quarterly revenue and core operational earnings as a prolonged strike in South Africa's platinum belt failed to push up prices.

Aquarius is unaffected by the strike, giving it an opportunity to benefit from a shortage in supply.

The company's London-listed shares rose as much as 6.3 percent, but analysts said this was because the date for a $À million (R2.4 billion) rights issue had passed, rather than |because of earnings.

The miner reported earnings before interest, tax, depreciation and amortisation of $11m for the quarter ended March 31, down from $30m a year earlier.

Revenue fell to $60m from $100m a year ago.

However, revenue and mine earnings before interest, tax, depreciation and amortisation rose from the previous quarter, driven by higher output at its main Kroondal mine.

Platinum prices have not jumped, despite more than half of primary platinum production being interrupted for more than three months by the strike affecting other miners. Platinum prices have risen only about 3 percent since the beginning of the year.

The miner said the average platinum group metals basket price in dollar terms was down 11 percent from a year earlier, but increased 2 percent from the previous quarter.

"I think pricing was expected to benefit producers like Aquarius that aren't affected by the strikes, but that hasn't taken place," Panmure Gordon analyst Troy O'Dwyer said.

London-listed Aquarius Platinum was largely shielded from the strike as it signed a one-year agreement with the National Union of Mineworkers last June, a rare deal in an industry rocked by labour unrest and a bloody union turf war.

The world's top three platinum miners - Anglo American Platinum, Impala Platinum Holdings Ltd and Lonmin - are caught in a 14-week-old strike over a wage dispute that has cost producers more than R15bn.

Aquarius said attributable production from operating mines remained ahead of its guidance and in line with production in the third quarter of last year. The Kroondal mine accounts for about 60 percent of Aquarius's production. - Reuters

Cape Argus

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Source: Cape Argus (South Africa)

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