Royal Bafokeng Platinum (RBPlat) reported a strong set of financial results for the half-year to June yesterday, posting a 103 percent increase in earnings a share to 87.4c.
The results were boosted by a weaker rand against the dollar, a strong operational performance and industrial peace at the group’s mines.
The mid-tier platinum producer, which is majority-owned by the Royal Bafokeng tribe, said it was unscathed by industrial action that has rocked the rest of the mining industry.
Steve Phiri, the chief executive, said there had not been any strikes at RBPlat’s operations because the company spoke to unions regularly. “You don’t speak with people [only] when there is a problem. What is important is how we engage with one another,” he said.
RBPlat said it had cut its labour force by 11 percent, from 6 744 to 5 984 employees, in the period under review. Asked if there would be further cuts, Phiri said: “We are not looking forward to cutting the numbers. There is no likelihood of section 189 retrenchments coming at this stage.”
RBPlat’s share price rose 2.86 percent to R52.50 on the JSE yesterday after it announced it had doubled the size of its credit facility to R1 billion.
“This should buy time for the PGM [platinum group metals] markets to improve before the planned capital raising is necessary to complete the Styldrift project,” said Michael Kavanagh, a metals and mining analyst at Noah Capital Markets.
RBPlat had performed better than its peers, including Aquarius Platinum which posted a net loss of $288 million (R2.8 billion) last week because of a $226m impairment after the group wrote down the value of assets. Anglo American Platinum reported headline earnings a share of R5.14 in the first half of this year, an 88 percent increase primarily due to a weaker rand.
RBPlat’s output increased by 1.1 percent compared with the first half of last year and ended at 130 278 platinum group metal ounces and 84 628 platinum ounces respectively.
RBPlat said revenue from toll concentrating of UG2 – a type of platinum-metal bearing reef – increased 203 percent to R98.3m for the period under review from R32.4m in the first half of last year. The concentrating increase was as a result of a 157 percent increase in toll concentrating ounces and a 17 percent increase in the rand basket price.
Parent Royal Bafokeng Resources received a notice from the SA Revenue Services (Sars) indicating that the tax authority had completed an audit of its 2008 to 2010 tax assessments and intended reopening these assessments to effect certain proposed adjustments. These primarily related to Sars intending to disallow interest on shareholders’ loans amounting to R586m previously deducted by Royal Bafokeng Resources and allowed by Sars in the 2008 and 2009 income tax assessments.
The group “has enlisted independent advice regarding this matter and, based upon the consultation to date, remains confident that it has a reasonable prospect of successfully defending the matter”, RBPlat said.
The company anticipates full-year milling of 2.3 million tons due to repairs at its Bafokeng Rasimone platinum mine concentrator which are expected to take about two weeks.