JOHANNESBURG - Impala Platinum (Implats) yesterday recorded a 240percent bumper profit during the year ended June and rewarded its shareholders handsomely for the first time in six years on the back of strong metal prices.
Implats, which operates mines in South Africa, Zimbabwe and Canada with 50000 employees, swung from a R6.8billion profit last year to R23.3bn.
The world's second biggest platinum producer said group revenue rose 44percent to R69.9bn during the period. It said headline earnings soared 431percent to a record R16.1bn or R20.75cents per share from R3bn the prior year.
The cash-flush miner reinstated its dividend payments as free cash flow jumped 87percent to R14.4bn, declaring a R4 per ordinary share final dividend, in addition to R1.25 interim to take the total payout for the year to R4.2bn or R5.25 a share.
Chief executive Nico Muller said Implats used to give back to shareholders regularly until 2008.
Muller said the group went into a short period of reinstatement in 2013.
“We have been absent from dividends for the last six years. I am very delighted that we reinstated the interim dividend and final dividend during the 2020 financial year,” said Muller.
Implats' fortunes were boosted by the 46percent jump in US dollar basket prices to $1624 (R27199) a 6E ounce, driven by stronger palladium and rhodium dollar prices as investment demand was spurred by the safe-haven appeal of precious metals.
The group said that the higher dollar metal prices realised a 43percent or R20.8bn benefit. Rhodium revenue increased by R10.6bn, while higher palladium and platinum prices saw revenue gains of R8.8bn and R1.1bn respectively. However, production disruption due to the Covid-19 pandemic resulted in a loss of 9percent or 290000 ounces of 6E of production.
Refined production was estimated to be between 2.8 and 3.4million 6E ounces for 2021 financial year.
Highlights for the year included the reversal of a 2018 decision to close several loss-making Impala Rustenburg shafts and possibly cut 12500 jobs after gains in productivity, safety and efficiency resulted in upward revisions to the planned production.
Implats signed a multi-year wage agreement and completed the acquisition of palladium producer Impala Canada, previously known as North American Palladium. Implats said net cash was R5.7bn at year-end after funding R9.4bn for Impala Canada.
Muller said there were potential growth opportunities in Zimbabwe.
“We would probably, at the right time, consider potential processing capacity in Zimbabwe as a means of promoting potential further growth going into the future,” said Muller.
Investment analyst at Anchor Capital, Seleho Tsatsi, said Implats reported very strong earnings growth driven by the significant increase in the platinum group metal (PGM) basket price.
“The basket price was up 46percent in US dollars and more than offset the volume challenges that the company experienced due to Covid-19 lockdown restrictions. At current PGM prices, the business is generating significant cash, evidenced both by the R14.4bn of free cash flow for the year and the R5.7bn of net cash on the balance sheet,” said Tsatsi.
Implats shares declined 1.67 percent on the JSE yesterday to close at R152.68.
BUSINESS REPORT