On Wednesday Sibanye Gold announced it expected a significant increase in earnings for the six months to the end of June.
This comes even after an impairment of approximately R820 million to the value of the Cooke 4 mining assets, and the gain is due to the 31 percent recovery in the average rand gold price.
The company said in a statement that headline earnings per share (HEPS) were expected to be between 484 percent and 611 percent (or 92 to 116 cents per share) higher than the 19 cents per share reported for the comparable period last year. At the earnings per share (EPS) level, which includes certain non-recurring items, the increase is expected to be between 70 and 110 percent, or 14 to 22 cents per share, higher.
The primary difference between the HEPS and EPS forecasts was the impairment of approximately R820 million to the value of the Cooke 4 mining assets, which “was deemed prudent considering the continued underperformance at Cooke 4”.
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James Wellsted, senior VP for investor relations at Sibanye, told African News Agency that any comparison with figures for previous years was skewed by a number of exceptional items, but confirmed that improved operational performance combined with a better gold price was expected to lift earnings significantly for the period under review.
Sibanye announced on July 11 that it had given notice in terms of Section 189A of the Labour Relations Act 66 of 1995, and is currently engaged in consultation with affected stakeholders regarding the future of Cooke 4. At the normalised earnings level - which is adjusted for gains and losses on foreign exchange and financial instruments, non-recurring items and share of results of associates after taxation - Sibanye sees earnings improving by between 678 percent and 848 percent (or 183 to 229 cents per share) on the 27 cents per share reported for the previous comparable period.
Sibanye said that gold production for the six months to the end of June was approximately 23 200kg, up from 22 204kg in the previous comparable period. Also, production of platinum group metals for the six months was forecast to be approximately 178koz, up from 168koz for the previous comparable period, with Kroondal and Mimosa expected to deliver all-time record PGM production.
AFRICAN NEWS AGENCY