Sibanye-Stillwater records high profits for the second half of the year

Diversified precious metals producer Sibanye-Stillwater has resumed its dividend flow after posting record interim results on the back of higher prices.

The precious metals group said all operating segments reported higher year-on-year production despite the challenges and disruptions caused by Covid-19. Along with much higher prices received for the gold and platinum group metals (PGMs) it produced, it said its operational results underpinned a strong performance for the six months to end-June.

Its US PGM operations grew production by 5% to 297,740 ounces, with recycled production declining 6% to 397,472 ounces, primarily due to a global slowdown of auto catalyst collections and deliveries and logistical constraints caused by global Covid-19 restrictions. Production from its SA PGM operations increased by 5% year-on-year to 657,828 ounces, with the inclusion of the Marikana operations for the full six-month period offsetting lost production due to Covid-19 disruptions.

Production from its SA gold operations of 403,621 ounces was 17% higher than for the comparable period in 2019, which was impacted by an AMCU strike across its managed gold operations, excluding DRDGOLD.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) surged 718% to R16.5 billion while net profit rose from R255 million to R9.39 billion. It said normalised earnings of R8.85 billion and free cash flow of R10.9 billion helped it continued to reduce debt to below its target, putting it in the position to pay an interim dividend of R1.34 billion, or 50c per share.

Sibanye said the continued improvement in its safety performance was noteworthy and achieved in exceptional circumstances. Safe production milestones included the group recording its first fatality free quarter since the fourth quarter of 2018, with its SA gold operations achieving a remarkable deep level hard rock safe production milestone of 12.4 million fatality free shifts by the end of June.

The manner in which the Group was able to navigate its way through the challenges posed by Covid-19, emerging in a robust financial position with Group leverage continuing to fall, while at the same time providing substantial financial and social support to employees and communities, was extremely pleasing,” CEO Neal Froneman said. “The SA operations are likely to achieve optimal production levels by Q4 2020, with the outlook for precious metals prices constructive, the operating and financial outlook for H2 2020 is extremely positive.”

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