Northam warns shareholders of a wider interim loss

Johannesburg -  Northam Platinum [JSE:NHM], South Africa’s second biggest platinum producer, advised shareholders on Friday that the group will report a loss, notwithstanding its reputation as excellent performing company. It expected to have widened its interim loss a share and headline loss a share by 20% to 40%.

The miner said its results for the period ended December 31 2017 showed that the loss will be between 77.7c and 90.7c per share. The headline loss is expected to range between 77.6 cents per share and 90.5 cents per share, compared with the loss per share of 64.8c and headline loss per share of 64.7c, reported for the period ended December 31 2016.

Northam said these expected ranges in respect of both the loss per share and headline earnings per share, represent an increase of 20% and 40% per share.

The miner blames the anticipated loss on its JSE-listed empowerment vehicle, Zambezi Platinum, which holds  31.4% of Northam. Zambezi's preference share dividends are consolidated in the group’s results in terms of the International Financial Reporting Standards.

The Zambezi preference shares accrue dividends at a cumulative variable dividend of 3.5% over the prime overdraft interest rate in South Africa.

"Shareholders are reminded that 159.9 million Northam shares are held for settlement of the Zambezi preference share liability in terms of the Northam guarantee and the accrued dividends are consolidated into the Northam results as a non cash item for Northam," the miner stated.

Although the platinum mining industry has experienced difficult economic conditions during the reporting period, Northam said, both of the group’s operating mines, Zondereinde and Booysendal, are expected to record an operating profit.

The weighted average number of Northam shares in issue for the period ended December 31 2017 was 349.9 million shares. Northam is set to publish its interim results on February 23.