Highlights:

• Fatality-free year in managed operations for the first time in the Company’s history
• Sustainability remains a core focus – awarded first place out of 55 global precious metals peers in the Sustainalytics ESG Ratings
• PGM production of 4.4 Moz and refined PGM production of 4.6 Moz – in line with guidance despite headwinds
• Robust PGM fundamentals – 27% increase in the USD basket price and a 38% increase in the rand basket price
• Delivery of industry-leading returns:
  • Record earnings before interest, tax, depreciation and amortisation (EBITDA), more than doubling to R30.0 billion
  • Return on Capital Employed (ROCE) increased to 58%
  • Record headline earnings per share – increased 145% to R70.87/share
  • A strong balance sheet, with net cash of R17.3 billion, up from R2.9 billion at the end of 2018
• Board declared a dividend for H2 2019 of R11.2 billion, or R41.60/share, comprising
  • Base dividend of 40% of headline earnings of R16.60/share
  • Special dividend of R25.00/share
  • Total dividend of the year of R52.60/share
• Continuing progress on the next phase of strategy delivery

Anglo American Platinum today reported a record set of financial results, accompanied by the company’s best-ever safety performance, reflecting management’s commitment to ensuring safe production while delivering value.

Chris Griffith, CEO of Anglo American Platinum, commented:

“For the first time in Anglo American Platinum’s history, we have had no workplace fatalities at our managed operations in the year. Our intense focus on eliminating fatalities is yielding positive results and, while we are proud of this milestone, we also need to eliminate injuries and extend our focus to our non-AAP managed Joint Venture operations. We are deeply saddened to have lost one of our colleagues, Mr Thomas Maluleke, at our independently managed Modikwa JV operation. We express our deepest condolences to his family, friends and colleagues.”

Operationally, PGM production was up 1% year-on-year to 4.4 Moz, notwithstanding the impact of power load shedding by Eskom, which led to the loss of 38,000 PGM ounces of production and an unprotected strike at Mototolo Mine. Mogalakwena and Unki mines delivered record production with the turnaround plan at Amandelbult on track, with a 12% improvement in production in H2 over H1. This improvement is expected to continue into 2020, as development and equipping at the mine has increased.

Refined production was up 11%, with the Eskom power outages across our processing facilities resulting in an increase in work-in-progress (WIP) inventory by 89,000 PGM ounces, which will be refined in 2020.

Unit cost increased by 8% to R10,189 per PGM produced owing to the impact of load-shedding and the impact of a draw-down on Mogalakwena ore stockpiles.

PGM prices rose sharply in 2019, with a 27% increase in the US dollar basket price to USD2,891 per platinum ounce sold (compared to USD2,219 in 2018) and attributed to a 48% increase in the palladium price and 73% increase in the rhodium price. Coupled with a 9% weaker average rand/dollar exchange rate of R14.50 (2018: R13.33), the Rand basket price was up 38%, resulting in a 33% increase in net sales revenue to R99.6 billion. The Company generated operating free cash flow of R16.9 billion, further strengthening the balance sheet to a best-ever net cash position of R17.3 billion. This compares to the R2.9 billion net cash position at 31 December 2018.

A cash dividend of R11.2 billion, or R41.60/ share was declared for the second half of 2019, based on the Company’s dividend policy of 40% of headline earnings of R16.60 per share, plus a special dividend of R25.00 per share – the first special dividend to be declared since 2001. This brings the total dividend for the year to R52.60 per share.

Outlook

PGM production guidance (metal-in-concentrate) is 4.2 – 4.6 million PGM ounces for 2020, with refined production expected to be higher at 4.2 – 4.7 million PGM ounces due to the build-up in work-in-progress inventory, owing to the power outages in the fourth quarter of 2019. Sales volumes will be in line with refined production.

The medium-term outlook for PGMs remains positive, with the three major PGMs – platinum, palladium and rhodium – expected to be in a combined fundamental deficit in 2020. Primary mine supply should decline modestly, while tightening emissions regulations are likely to boost automotive demand for palladium and rhodium in the light-duty sector and platinum in the heavy-duty sector. Longer-term, the Company is committed to expanding the role PGMs can play in enabling a lower carbon economy.

Robust demand for PGMs, combined with the Company’s focus on investing in fast-payback, value-accretive projects and implementing world-best operating practices, will continue to drive strong earnings.

“This is a safer, more resilient and productive business today as a result of the actions we have taken in recent years, and I’m pleased to say that there is considerable additional value that can be unlocked,” Griffith said.

Today, Griffith also announced that he will be stepping down as CEO and executive director at the Company’s AGM in April. “After more than seven years at the helm, and given all that we as a team have achieved, I feel this is now the natural time for the next generation of leadership to take this business forward and deliver further value. I would like to thank my executive team, senior management and all Anglo American Platinum employees for their hard work, dedication and support that has taken this great Company to where it is today.”

Discover more information in our Annual Results Booklet.