Anglo Platinum, the world's largest producer of pgms, has announced a 62.8 per cent annual reduction in headline earnings to R2.09 billion, which the firm attributed to the strong rand and associated higher operating costs. The company achieved a gross profit margin of 23.7 per cent and declared a final dividend of 270 cents per share.

However, refined platinum production rose ahead of targets to 2.31 million ounces, with the group predicting further increases for 2004 to 2.45 million ounces.

Overall, total platinum received at the smelters, including platinum purchased from joint venture partners, increased by 8 per cent, with the Rustenburg UG2 project, Modikwa, Bafokeng-Rasimone, Potgietersrust and Union Section all producing more ounces than in 2002.

Overall gross sales revenue decreased by R3.78 billion to R16.51 billion, while the net sales revenue per platinum ounce sold decreased by 19.3 per cent, from R8,690 in 2002 to R7,017 in 2003. The cost of sales also increased by R2.06 billion to R12.19 billion.

Commenting on the results, CEO Ralph Havenstein, described 2003 as a 'very challenging year'.

'Despite the decline in headline earnings when compared to 2002, which resulted mainly from the strength of the rand against the US dollar, I am pleased with the increased production from the ramp-up operations,' he added.

Angloplat explained that the increase in smelting capacity achieved by the commissioning of the Polokwane Smelter, the Anglo Platinum Converting Process (ACP) plant and the Slag-cleaning Furnace was the highlight of process operations in 2003.

The temporary increase in pipeline stock levels generated by the commissioning activity was successfully processed by the end of 2003, resulting in the significant increase in production outlined above.

'The performance of our process operations in 2003 was pleasing given the significant additional smelting capacity resulting from the commissioning of the Polokwane Smelter,' Mr Havenstein added.

'It is also pleasing to note that the temporary increase in pipeline stock levels reported with the interim results was successfully processed by the end of 2003, resulting in a significant increase in production and sales volumes in the second half of the year.'

Angloplat also underlined its 2003 strategy review, commissioned in light of the growing strength of the rand, which led to a number of expansion projects to be slowed.

Production of refined platinum is now planned to total 2.9 million ounces in 2006, which represents a compound annual production growth rate of 8 per cent from 2003 to 2006.

The group also said it expects platinum prices to remain firm due to 'the fundamental strength of demand for the metal'.

Angloplat also said earnings for 2004 should be higher than they were in 2003, but they remain sensitive to the strength of the rand against the US dollar and US dollar metal prices.