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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