It mentioned its headline earnings per share for the yr to June 30 might lower by as a lot as 87% to between 3.24 rand and 5.66 rand from 24.15 the earlier yr.
That is primarily attributable to a 35.5% fall within the rand value for its metals and regardless of a 7.3% enhance in gross sales volumes, Northam mentioned in a buying and selling assertion.
“The present value atmosphere could final for a while and this, mixed with greater basic inflation, is inserting stress on your complete PGM sector,” Northam mentioned.
Nedbank Group analyst Arnold Van Graan mentioned Northam’s operational efficiency, which elevated refined steel output from its personal manufacturing by 10%, had lessened the impression of low steel costs and saved unit value will increase beneath inflation.
“Decrease steel costs and progress capex would have weighed on free cashflows; nevertheless, the corporate’s counter-cyclical progress technique stays in place and helps offset the impression of weaker PGM costs,” Van Graan mentioned in a observe.
Steel costs are a difficulty throughout the sector.
Northam’s greater rival Impala Platinum on Aug.7 mentioned it can report a fundamental lack of as much as 17.8 billion rand after decrease steel costs led to $1 billion in impairments as a result of its belongings declined in worth.
The world’s greatest PGM producer Anglo American Platinum mentioned its revenue fell 18% to six.5 billion rand within the six months to June 30, weighed down by restructuring prices after it lower 3,700 jobs to scale back spending along with the impression of decrease steel costs.
Northam will launch its monetary outcomes on Aug. 30.
(By Nelson Banya; Enhancing by Barbara Lewis)