Lonmin shares soar over 7% as the platinum miner reveals the full extent of a lengthy strike in the sector

by , 11 November 2014

Yesterday, Lonmin Plc released its results for the full-year to the end of September.

The platinum producer revealed the full extent of a five-month strike that hit the sector between January and June this year.

But investors greeted the results well as Lonmin confirmed that it didn't need to raise more funds.

Let's take a closer look at what the results showed…

Lonmin points to better times ahead

Lonmin [JSE:LON] posted a “$326-million annual pre-tax loss,” which met forecasts by analysts, reports Fin24. The platinum producer said it has plans to “improve its performance”.

Lonmin, the world’s third largest platinum producer, was amongst the three platinum miners which bore the brunt of five-months’ worth of strike action at its mines. After downing tools on 25 January, workers only started to return to work on 25 June.

The strike led to the company losing “391,000 of platinum ounces,” notes BDLive. Ben Magara, the CEO, said the industrial action “cost Lonmin $307 million”.

Making matters worse was the platinum price sinking to “a five-year low,” says IOL. This made Lonmin’s job of generating cash even harder.

Lonmin plans to make savings of R2 billion over the next three-years

But the company plans to turn things around over the next few years, adds BDLive. Lonmin wants to boost productivity and reduce its costs, translating into “savings of more than R2 billion”.

Yesterday’s results sent shares in Lonmin soaring.

Investors appear happy with confirmation from the company that it doesn’t “see the need to raise funds this financial year,” reports Bloomberg. Mr Magara says they have “sufficient bank facilities”.

By market close yesterday, shares in Lonmin were 7.17% higher at R34.99.

Shareholders will be hoping the platinum producer can turn back into profit territory over the new financial year.

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Lonmin shares soar over 7% as the platinum miner reveals the full extent of a lengthy strike in the sector
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