Lonmin tops revised output target

Platinum producer Lonmin saw a rise in both revenue and profit for the full year ended 30 September.

Revenue increased from $1.58bn last year to $1.99bn, while underlying profit before tax, which excludes certain exceptional items, was up 32.9% year-on-year at $315m from $237m the year before. Reported profit before tax advanced to $293m from $240m last year.

Earnings per share rose significantly from 56.8c to 134.4c, while underlying earnings per share rose 59.0% to 111.6c from 70.2c last year, ahead of analysts' expectations.

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Chief executive officer Ian Farmer said: "We have worked hard in a difficult market to build robustness into the business wherever we can, and our solid end of year position reflects this.

"Our operational and financial performance have delivered a solid performance, despite seeing two months of serious disruption, caused by an illegal strike and by a very sad series of fatalities in the earlier part of the year.

Cost per ounce of platinum group metals (PGM) produce was R7.534. This was up by 11.2% on 2010, largely as a result of above-inflation increases in the wage bill and the electricity charges. Had the production interruptions arising from the safety induced stoppages and the illegal strike at Karee not occurred, the year on year cost increase per PGM ounce would have been 8.0%.

During the fourth quarter, production was restored back to the normal operating levels and the momentum established earlier in the year was regained, following the illegal strike at the Karee operations.

Platinum sales for the fourth quarter were 24.9% lower than the prior year period at 241,979 platinum ounces, meaning the company slightly exceeded its downwardly revised sales guidance for the year of 720,000 ounces.

Chrome sales increased by 76.5% when compared to the prior year period with the commissioning of the chrome plants at Rowland.

The group has set a sales target of 750,000 platinum ounces for 2012.

Operating revenue for the quarter was $7 million.

The firm has recommended a final dividend of 15c per share, equal to that paid the previous year.

Net debt decreased significantly by $141m to $234m since 30 September 2010.

NR