Platinum miner Lonmin swings into profit

LONMIN, the world's third biggest platinum producer, swung to a first-half profit after metal prices rebounded and costs fell.

Although the company did not declare an interim dividend it said it hoped to pay out a final dividend as market conditions improve.

A rebound in car manufacturing, which uses platinum for catalysts in exhaust systems, is one of the factors driving increased sales for the company, which operates mines across South Africa.

In the six months to 31 March the company saw underlying pre-tax profits come in at 55 million compared with a loss of 79m in the same period last year.

Lonmin also announced plans to issue up to 9.65 million shares to raise funds to stabilise mining firm Incwala, which was set up under South Africa's black empowerment programme but ran into financial difficulties.

Investors welcomed the results, largely shrugging off dilution from issuing shares.

"The big restructuring they went through last year is starting to pay off. This is a vastly different business from the one we were looking at two years ago, all for the positive," said analyst Rebecca O'Dwyer at Investec Securities.

"It was a strong set of results. They came in well ahead of what we were forecasting, and cost control has been good."