AAL Anglo American Plc

JOHANNESBURG—Anglo American Platinum Ltd., the world's top producer of the precious metal, said Monday that low metals prices and a tax adjustment hit its earnings hard in the first half of 2016.

The Johannesburg-listed miner reported a profit of 938 million South African rand ($65.4 million) for the six months ended June 30, down 62% from the same period a year earlier.

Amplats shares on the Johannesburg Stock Exchange were down 0.9% at 385.70 rand a share in early trade Monday. Still, the stock has gained 51% over the last 12 months, on the back of rising platinum futures prices, a plunging South African rand and off a very low base.

Amplats, a majority-owned unit of globally diversified miner Anglo American PLC, reported headline earnings, which strip out certain exceptional and one-off items, of ZAR1.04 billion for the first half of 2016, down 58% from the same period in 2015, in line with the company's previously announced guidance.

The company has previously said that the decrease in profit is primarily due to an after-tax gain of ZAR1.6 billion booked during the first half of 2015, thanks to an adjustment to metal inventory levels, as well as low metal prices during the first half of 2016. The company's average U.S. dollar basket price per platinum ounce sold fell 24% in the first half of 2016 to $1,632 from $2,157 in the first half of 2015.

Still, all mining operations continued to be cash flow positive, and during the first half of 2016, Amplats reduced net debt 23% to ZAR9.92 billion. Amplats also reaffirmed its production guidance for the year, and said it expects platinum production to come in at the upper end of the guided range of 2.3 million to 2.4 million ounces.

Refined platinum production fell 8.2% to 1.01 million ounces in the first six months of the year, while total platinum production rose 1.8% to 1.15 million ounces, the company said. However, despite benefits from a weaker South African rand and a rise in platinum futures prices, overall metal prices continue to present a challenge for the company

As a result, Amplats is continuing to restructure its operations and is in the process of selling its Rustenburg assets, and continues to look for a buyer for its Union mine, as well as an exit from its joint ventures at the Bokoni, Pandora and Kroondal mines.

"We've advanced disposals of noncore assets," Chief Executive Chris Griffith said on a call Monday. The sale of the company's Rustenburg assets to Sibanye Gold Ltd. is expected to close by the end of 2016, Mr. Griffith said. In addition, a party interested in the company's Union mine is currently completing due diligence on the assets, he said.

"We are absolutely adamant that we are not going to have unprofitable ounces going to the market," Mr. Griffith said.

Amplats, like other South African platinum producers, has been hammered by labor issues and low prices, which have driven away investment. Amplats reported net revenue of ZAR30.66 Billion for the first half of the year, up 2.7% from the six months ended June 30, 2015, but missing expectations for revenue of ZAR32.5 billion.

Write to Alexandra Wexler at alexandra.wexler@wsj.com

(END) Dow Jones Newswires

July 25, 2016 06:35 ET (10:35 GMT)

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