* Lowering debt needed before resuming dividend
* Company seals sale of Union mine
(Adds CEO comments, details)
By Ed Stoddard
JOHANNESBURG, Feb 15 Anglo American Platinum
, the world's top producer of the precious metal,
announced a swing back into profit on Wednesday, along with the
sale of another mine, but said it was still not ready to resume
Amplats, which has not paid a dividend since 2011, has
turned its focus on mechanised mining while shedding
labour-intensive operations such as its Rustenburg mine, a
flashpoint of union violence which it sold last year to Sibanye
On Wednesday Amplats, which is majority-owned by Anglo
American, announced it was also selling its Union mine
to unlisted black-majority resources group Siyanda Resources for
an initial purchase price of 400 million rand ($30 million).
Further payments depend on the level of cash flow from the
Cash generated from the sale will go towards bringing down
the company's debt, which it reduced to 7.3 billion rand in 2016
from 12.8 billion rand, partly from the proceeds of disposals
and customer pre-payment deals.
"Owing to the net debt position of the company and uncertain
macroeconomic environment, the board has decided not to declare
a dividend in 2016," the company said.
Amplats' share price was down over 3 percent, in line with
falls across the sector, with a resumption of dividend payments
not widely expected. In contrast shares in sister company Kumba
Iron Ore fell sharply on Tuesday after Kumba said it
was not paying a dividend.
"We are marginally disappointed. However, we believe that
the company’s stated strategy is correct," said Abdul Davids,
portfolio manager at Kagiso Asset Management, which holds
"We support the focus on debt reduction and believe this
will support the resumption of the dividend in the 2017 or 2018
financial years," Davids added.
Resuming dividend payouts was a priority, Amplats Chief
Executive Chris Griffith told Reuters.
"When we think about capital, we think about reintroducing
the dividend. And we are getting into a position where we can
talk about a dividend," he said.
"Getting debt down is one metric but the board will
concentrate on more than these big once-off events. You want to
be certain your underlying cash flow is sustainable."
The company said it wanted to get its debt in 2017 below 5
The company reported headline earnings of 1.9 billion rand
in 2016, which compared with a restated loss of 126 million rand
"This reflected favourable foreign exchange movements,
operating and overhead cost reduction, lower restructuring costs
and the impact of impairments in the comparative period," it
said in a results statement.
(Editing by Greg Mahlich)