LONDON (Alliance News) - Lonmin PLC on Monday said it remains on track to deliver its full-year guidance, after reporting a narrower loss in the first half thanks to a small rise in revenue and a fall in impairments and other items.
The platinum miner operating in South Africa reported a pretax loss of USD21.0 million in the six months to the end of March, compared to the USD118.0 million loss booked a year earlier, after revenue experienced a slight lift and the level of impairments booked fell.
Revenue in the period rose to USD515.0 million from USD508.0 million a year earlier, allowing Lonmin to squeeze out earnings before interest, tax, depreciation and amortisation of USD36.0 million compared to a USD6.0 million loss last year.
Depreciation, amortisation and impairments totalled USD51.0 million in the first half, falling from USD78.0 million a year earlier.
That pushed Lonmin to an operating loss of USD15.0 million, but that loss was still narrower than the USD84.0 million operating loss a year earlier.
Revenue rose in the period after production of refined platinum rose by a third year-on-year to 348,885 ounces, though that was partly driven by smelter stoppages interrupting processing operations in the previous year, which was not repeated in the most recent period.
Platinum sales in the period were up 31% to 361,882 ounces.
Lonmin reiterated its production and cost guidance for the full year, with the miner aiming to sell 700,000 ounces of platinum at a unit cost of ZAR10,400 per ounce.
However, Lonmin cut its capital expenditure budget for the remainder of the year, stating full-year expenditure will now be USD105.0 million compared to the previous budget of USD132.0 million. Expenditure in the first half amounted to USD27.0 million.
Cost savings are ahead of schedule, with Lonmin delivering 67% of its full-year target in the first half. The miner aims to deliver cost savings worth ZAR700.0 million over the full year, with ZAR469.0 million booked in the first six months.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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