UPDATE 2-Aquarius Platinum warns on forex, swings to profit

* Warns about rand currency strength hitting margins

* Net profit of $9.5 mln vs loss of $21.5 mln

* Output falls 25 pct after mine closure, strikes

* Shares fall 3.2 pct, lags mining index

(Adds analyst comment, shares, more details)

By Eric Onstad

LONDON, Oct 27 (Reuters) - Aquarius Platinum Ltd (AQP.L), the world's fourth biggest platinum producer, warned that a strong South African currency was erasing gains from rising metals prices as it swung to a first-quarter profit on Tuesday.

But with a healthy balance sheet, it was on the lookout for more growth opportunities after buying Ridge Mining earlier this year.

Aquarius shares in London were down 3.2 percent to 283.50 pence by 0824 GMT, underperforming a 0.8 percent fall in the UK mining index .FTNMX1770.

Aquarius shares in London have gained 75 percent this year but are still well below last year's peak of 881 pence.

The company -- listed in London, Johannesburg and Sydney (AQPJ.J) (AQP.AX) -- said more stable metals prices allowed it to move into profit despite lower production after a mine closure and strikes.

"We view the results as surprisingly respectable considering they took a strike -- the company remained profitable and cash generative in the quarter," Liberium Capital said.

"Given Aquarius has the safest balance sheet and the best operating track record, its seems anomalous that it has half the PER (price earnings ratio) rating on a price recovery scenario of its larger peer Lonmin (LMI.L)."

Aquarius posted a net profit of $9.5 million for the three months to the end of September compared with a net loss of $21.5 million in the same period last year.

"This quarter's results reflect reduced volatility in PGM prices, which have gradually risen from the low base experienced in October-December 2008," Chief Executive Stuart Murray said.

"That said, the continuing strength of the rand and rising input costs... will continue to place margins in the South African platinum industry under pressure."