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JOHANNESBURG (Reuters) - Anglo American Platinum (AMSJ.J), 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 dividend payments.
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 Gold (SGLJ.J).
On Wednesday Amplats, which is majority-owned by Anglo American (AAL.L), 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 (24 million pounds). Further payments depend on the level of cash flow from the operation.
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 (KIOJ.J) 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 Amplats' shares.
"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 billion rand.
The company reported headline earnings of 1.9 billion rand in 2016, which compared with a restated loss of 126 million rand in 2015.
"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