By Devon Maylie

JOHANNESBURG--Impala Platinum Holdings Ltd. (IMP.JO) Thursday reported a drop in full-year earnings due in large part to a six-week strike that cut into its production and revenue generation.

Johannesburg-based Impala, the world's second largest platinum producer, said it plans to cut capital spending in the coming year to weather the weak platinum environment.

The platinum industry is being hit by a series of violent strikes. Lonmin PLC (LMI.LN) has stopped production at its mine for more than a week after 44 people were killed in a series of clashes between workers and with police. Most workers still haven't returned.

"These developments pose a significant risk to the industry," said Impala chief executive Terence Goodlace.

Impala was the first to be struck by a strike emanating out of worker grievances and a rivalry between two unions. The company said talks are still underway to solve labor relations issues at the mine.

The strike sharply reduced Impala's output for the year, by 150,000 troy ounces and revenue by 2.8 billion rand ($338 million). Refined platinum production totaled 1.45 million ounces for the year ended June 30 compared to 1.84 million troy ounces of platinum last year.

On top of the unrest, Impala said its earnings were lower due to weak demand and prices given that the major consumer, the European auto industry, is struggling. South Africa produces roughly 80% of the world's platinum, a metal largely used in auto catalysts to reduce greenhouse gas emissions.

Impala said for the full year ending June 30, revenue fell to ZAR27.6 billion from ZAR33.1 billion the year before. Gross profit fell to ZAR6.9 billion from ZAR11.64 billion. Net profit fell 37% to ZAR4.3 billion from ZAR6.8 billion the year before.

The company said it's also still in negotiations with Zimbabwe's government over the terms of its indigenization agreement signed earlier this year over a 51% stake sale in its operation to the government and local community entities.

Write to Devon Maylie at devon.maylie@dowjones.com

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