Anglo American Platinum’s guidance that interim headline earnings are anticipated to increase four-fold when it releases results next week received a muted response from investors, with the share price rising just 3.5% on Monday. This failed to even fully reverse a share price loss of 4% on Friday.

Izak van Niekerk, analyst at Mergence Investment Managers, said the jump in earnings was higher than consensus analyst expectations and accounted for up to 80% of the estimated full-year earnings expected by the market consensus. The consensus expectation for the full year would have to be adjusted upward. But he said the share price reaction was disproportionately muted, indicating the market either expects some one-off benefits in the numbers or consensus numbers may just have been stale.

“Amplats had good production numbers in the first quarter and analysts may not have adjusted their numbers for this.”

The much-improved earnings numbers from the world’s largest platinum producer are a result of improved operational performance as well as a better rand price for the various metals Amplats sells. But once-off benefits may also have played a role and been factored into the market’s cautious optimism.

In the trading statement for the six months to end-June, Amplats said that headline earnings for the period were likely to increase to as much as R3.415bn compared to R747m last year. Basic earnings for the period are likely to increase to as much as R2.270bn, compared with a loss of R1.187bn. Sufficient detail of whether nonoperational benefits drove the increase was lacking, said Van Niekerk.

Earnings may have benefited for a number of nonoperational reasons. Notably, Amplats completed its sale of the Union mine and Masa chrome and announced the disposal of its interest in the Bafokeng Rasimone Platinum joint venture.

“Earnings [or losses] from businesses on sale are excluded from the income statement once the decision has been taken to dispose of them,” said Van Niekerk. “But it’s difficult to say how much of that had an impact.”

Amplats could also have changes in estimates of the value of inventory in the production pipeline, which may have been fortuitous to the earnings number, he said. “If that were the case, it would not be a true reflection of the performance of underlying operations.”