Soaring profits tap cash dividends for Sibanye shareholders
JOHANNESBURG – Sibanye-Stillwater resumed cash dividends for the first time in three years during the six months ended June after profits soared buoyed by record gold prices.
JSE and New York Exchange-listed Sibanye-Stillwater on Thursday declared an R1.338 billion interim dividend, or 50 cents a share, on the change to its fortunes thanks to the jump in the gold price.
Normalised earnings increased to a record R8.84bn ($531 million) from an R2.11bn loss a year earlier.
“This has positioned the group to resume cash dividends, which were suspended following the acquisition of Stillwater in the first half of 2017, which resulted in a temporary increase in group debt,” chief executive Neal Froneman said.
The group acquired Stillwater Mining in the US for $2.2bn in 2017.
Sibanye-Stillwater said the board had deemed this declaration as prudent under the current circumstances, given enduring uncertainty around the ongoing impact of Covid-19 pandemic. Froneman said the interim dividend declared was equal to 15 percent of normalised earnings for the first half, which is below the 25 to 35 percent payout range of the company’s policy.
“The board will review the dividend at the end of the year according to the dividend policy,” said Froneman.
Gold producers are raking in cash after the gold price surged by almost 30 percent since January and touched $2 000 an ounce with the rand gold price also touching the record R1m a kilogram.
Froneman said that responsible strategic and operating decisions had minimised the effect of the Covid-19 pandemic on the business.
“We have emerged in a robust financial position with leverage continuing to fall, without the group having had to resort to additional financing, as required by many other companies globally,” said Froneman.
South African operations were suspended during the first five weeks of the national lockdown, with a progressive ramp-up in capacity permitted from May subject to Covid-19 workplace restrictions being applied, said the group.
Gold production from South Africa was 403 621 ounces for the first half, 17 percent higher than June 2019.
The company said 4 element (4E) Platinum Group Metals (PGM) production from the South African operations increased by 5 percent year-on-year to 657 828 4E ounces, with the inclusion of the Marikana operation for the full six month period offsetting lost production due to Covid-19 disruptions.
Looking ahead, the group revised 4E PGM production for 2020 from the South African PGM operations to be between 1.35 million and 1.45 million 4E ounces.
Sibanye shares closed 3.27 percent higher at R50.48 on the JSE on Thursday.