SIBANYE-STILLWATER yesterday declared a R8.54 billion interim dividend for the six months to the end of June after another record financial performance on the back of bumper precious metal prices.
Sibanye follows in the footsteps of other mining companies which have reported record profits this year, buoyed by the commodity super-cycle on rising global demand following intermittent lockdowns last year.
Platinum group metals (PGM) prices rose to an average R53 629 per ounce in the six-month period compared with R33 375 per ounce in the interim period last year.
The world's largest precious metals producer said that during the period it had seen a sustained recovery in production from the Covid-19 disruptions last year.
The group enjoyed higher production year-on-year from its PGM and gold operations in South Africa, while production from the US PGM operations remained flat.
Sibanye forecast full-year PGM output from its South African operations at between 1.75 million and 1.85 million 4E ounces, while 2E production from the US Stillwater mine would be between 620 000 and 650 000 ounces.
The improved operational performance, together with considerably higher commodity prices, saw Sibanye's half-year profit surging 160 percent to R25.32 million compared with R9.73m reported in the same period last year. This surpassed the group's previous record of R20.89m reported for the second half of last year by 21 percent, or R4.42m.
Headline earnings per share surged 141 percent year-on-year to 843 cents, and Sibanye declared an interim dividend of 292c per share.
Sibanye chief executive Neal Froneman said the results reflected the benefit of the group's geographic and commodity diversification.
He said they had continued their disciplined approach to capital allocation by investing in high-return sustainable brownfields projects, and the ongoing debt-reduction programme.
Gross debt was reduced by 44 percent from R28.14m at the end of June last year to R15.9m this year. This allowed Sibanye to close the six-month period with net cash of R10.2bn versus net debt of R16.1bn at the end of the first half of last year.
“This growth and diversification is likely to evolve further as we position ourselves to create sustainable value through delivery on our green metals strategy,” Froneman said.
He reiterated that Sibanye was looking at the battery metals sector as the next frontier to position itself as the global metals producer.
Earlier this year, Sibanye made preliminary steps in mobility battery metals with the acquisition of an initial stake in the Keliber lithium project in Finland and the proposed acquisition of the Sandouville Nickel Refinery in France. However, Froneman said primary expansion of the scale needed to meet the battery electric vehicle growth projected by some market commentators would be challenging.
“Progress made on our strategy to create additional value through an exposure to green metals is equally pleasing. Sibanye-Stillwater is particularly well placed to continue its value-accretive growth strategy through long-term delivery of the essential metals that the world requires,” he said.
BUSINESS REPORT