Sibanye-Stillwater posts record Q3 core profit despite Covid-19 impact
JOHANNESBURG - Miner Sibanye-Stillwater said on Thursday third-quarter core earnings reached record levels, boosted by higher metals prices, despite an 18% drop in output at its South African platinum mines.
The precious metals producer said group adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 182% to $922 million in the quarter ended September, compared with a year earlier.
Higher precious metals prices, including a surge in the gold price to record highs above $2,000 an ounce, have given miners a lifeline after disruptions caused by the coronavirus pandemic.
The higher metals prices and a weaker rand exchange rate are expected to continue to generate significant cash flow as the company normalises production run rates at its South African operations, Sibanye said.
"Following the resumption of the dividend in August 2020, the Group is well positioned to deliver superior total returns to shareholders," Sibanye-Stillwater chief executive Neal Froneman said.
Higher prices have also helped the company pay down debt, with its net debt to adjusted EBITDA ratio at 0.33 times by the end of the quarter
However, production at its South African platinum group metals (PGM) operations during the quarter fell 18% to 427,715 ounces driven by Covid-19 related constraints, while mined output from its U.S. operations was largely flat at 147,835 ounces.
Gold output for the quarter was little changed at 288,938 ounces compared to 287,330 ounces during the same period a year ago.
Following a review, the company said its Blitz project in the United States would be delayed by up to two years due to the suspension of growth capital in the prior two quarters.
Production from Blitz is now expected to reach a steady state run rate of approximately 300,000 ounces per annum by 2024.