CAPE TOWN - SIBANYE-STILLWATER anticipates a very big increase in attributable profit, to almost R30 billion, for the year to December 31, 2020, compared with the R62 million it reported in 2019, the group said on Friday.
Production from the Marikana operations for the full 12 months, following the acquisition of Lonmin in June 2019 and significantly higher than forecast synergy benefits, along with a return to profitability from the South African gold operations, following the strike in the first half of 2019, were the main drivers of the good performance, the group said in a trading statement.
In addition, average platinum and gold dollar prices were better in 2020 – the 4E platinum group metals (PGMs) basket price was 83 percent higher, while the gold price was 43 percent higher at R924 764 an ounce.
Rand depreciation against the dollar also boosted revenue, with the exchange rate on average 14 percent weaker, at R16.46 per dollar, for the period.
These benefits were partially offset by higher mining and income tax expenses, a loss on the early settlement of the dollar convertible bond, and a fair value loss on the deferred payment on the acquisition of the Rustenburg operation.
Earnings per share were expected to be 1 053 to 1 095 cents.Headline earnings were expected to be 1 047 to 1 089c. Attributable profit was forecast to be between R28.7bn and R29.2bn. The operating and financial results for the six months and year to the end of December are expected to be released on February 18.
The sharply improved profitability has been reflected in the share price over the year. The share closed 4 percent higher at R61.99 on Friday, more than two times higher than the R16.53 at which it traded in March last year.
Sibanye-Stillwater chief executive Neal Froneman said last month, in a production update for the year to December 31, 2020, that in the absence of unexpected disruptions, the group was well positioned to deliver more consistent and significantly improved operating results for 2021.
On Friday, the group also notified shareholders that the Public Investment Corporation had increased its total shareholding to 15.16 percent, from 14.39 percent.
Sibanye-Stillwater is the world’s largest producer of platinum and rhodium, the second-largest miner of palladium, a leading gold producer, and a significant producer of other PGMs and associated minerals.