Anglo Platinum out with interim results this morning

Anglo Platinum out with interim results this morning. The one thing that struck me immediately of course is the massive recovery, as the company points out "headline earnings of R2 559 million, up 532% on the first half of last year, in line with significantly higher metal prices." And on Friday Ford pointed to a strong recovery in the Auto market. Not just in America, but globally, that bodes well for the platinum producers.



Safety has been improved dramatically, as has productivity and costs have been reigned in. So I guess a well done and some check boxes ticked in that part of the score card. I remember Peter Major from Cadiz saying that Anglo Plats had gone from the lowest cost producer a decade ago to highest cost nowadays (the comment was made a while back) and in his mind that was unacceptable and management were to blame.



A bloated management. Still no dividend, but that is to be expected, a massive rights issue is fresh in all shareholders minds. Don't be fooled by the earnings and think, what!?, that is nuts that the stock trades at 742 ZAR, but yet for the half year earnings per share came in around 13 ZAR a share. The broader analyst community consensus is short of 40 ZAR next year and 53 the year after. So, a massive recovery all around, some hard yards ahead, but the worlds biggest platinum producer has weathered the storm.



On the ground and asking folks how "things" are going is always a good idea of how to gauge the recovery. I normally ask those questions after all the usual other questions, I am not trying to intrude. The restaurant I went to this weekend did not have a table available, out of 63 tables, I did ask. So roughly four to a table, you do the math. One fellow who works for a business that supplies the market with industrial and commercial cleaning, hygiene services as well as pest management services. He said orders were strong and they were writing new business.



Another fellow in the construction arena echoed the opposite, but he is leaving the space to go and work elsewhere. He basically said that government had stopped spending on the big infrastructural projects. No spend and no short term noise equals a sector that is trading at a big discount. Question, has this not always been the case, and did the construction stocks not just hit a purple patch?