Lonmin triples half year profits

Lonmin plc, the world’s third largest platinum producer, nearly tripled profits in the half year to end-March when compared with a year earlier.

A 42% increase in revenues to US$938 million in the six month period led to an after tax profit of US$102 million.

The company generated US$327 million in cash from its operations. Over US$200 million of this were from locked-up inventory after smelter issues in the September 2010 year were resolved and the stock build up was sold down.

Lonmin said: “In the 2010 financial year issues with the smelter led to a significant back end loading of sales, toll refining and the sale of concentrate together with a stock build-up.”

Platinum sales during the March quarter alone were up almost 38% compared with a year earlier at 251,880oz.

The company said: “The significant increase was due to the increased production and release of the stock built up in the first quarter when deliveries were impacted by adverse weather conditions in the northern hemisphere.”

Management says it is on target to achieve full year guidance of 750,000oz of platinum.

Capital expenditure was US$154 million. The full year estimate has been increased to US$400 million from US$380 million due to rand strength.

The company says it intends to grow output from its Marikana operations to 950,000/y by 2015. Lonmin already had a target of 850,000oz by 2013.