JOHANNESBURG - Mining company Sibanye-Stillwater said on Wednesday its recent credit rating upgrade from S&P Global was a pleasing reflection of the significant improvement in its operating and financial position.
S&P upgraded Sibanye’s issuer credit rating to ‘BB-’ from ‘B+’ with a stable outlook. It said materially higher cash flows owing to strong gold and platinum group metals prices had resulted in stronger-than-expected credit metrics and balance sheet”.
“Despite considerable operational disruptions and other challenges associated with the Covid-19 pandemic earlier this year, the group delivered solid results for Q3 (third quarter) 2020, with the production build up ahead of forecast, underpinning another record financial result,” Sibanye-Stillwater chief financial officer Charl Keyter said on Wednesday.
“Production from the South African operations is expected to normalise during Q4 2020, underpinning a more robust outlook for the group, should precious metals prices sustain at current levels.”
In August, S&P Global’s peer Fitch Ratings assigned a first-time issuer credit rating of ‘BB’ with a stable outlook to Sibanye.
A Fitch report published on November 2 noted that the issuer default rating “reflects a robust financial profile with forecast funds from operations gross leverage comfortably below 1x in the medium term, and strong demand fundamentals of palladium and rhodium in the next decade”, according to Sibanye.
Last week, the company said its operational recovery from a severe South Africa lockdown in response to the Covid-19 pandemic had progressed well.
Like other ’non-essential’ businesses, production at Sibanye’s South African operations was brought to a halt for several months from March 27 as the government enforced a hard lockdown to try and contain transmissions of the coronavirus.
In last week’s operating update, chief executive officer Neal Froneman said the build-up to normalised production levels after the lockdown was eased had progressed better than planned, with about 92 percent of the workforce recalled by the end of the third quarter.
African News Agency