Northam Platinum realises record revenue and profit
Despite the challenges of the COVID-19 pandemic, this has been a record year for Northam. The group achieved record sales revenue, record operating profit and record earnings before interest, taxation, depreciation and amortisation (“EBITDA”) for the year.
These record outcomes were achieved notwithstanding the impact of mine and production stoppages, which occurred as a result of the COVID-19 induced lockdown.
Key features:
– Record revenue of R17.8 billion
– Record operating profit of R5.3 billion
– Record EBITDA of R6.0 billion
– Record normalised headline earnings of R3.4 billion equating to 676.3 cents per share, up 150.4%
– Record profit after tax of R2.2 billion
– Return of shareholder value, through 46.7% Zambezi preference share ownership
– Net debt of R3.3 billion
Prior and up to the commencement of the lockdown period, the group was on track to achieve record production from its own operations during the year ended 30 June 2020.
Sales revenue increased by 67.3% to R17.8 billion (F2019: R10.6 billion) for the year. This increase is attributable to a 60.8% rise in the 4E basket price to USD1 764/oz (F2019: USD1 097/oz) and a 10.9% weaker ZAR/USD exchange rate realised.
Despite logistical hurdles associated with the COVID-19 pandemic, including border closures that made the distribution of refined metal challenging, the group maintained robust refined metal sales of 560 238 4E oz.
This highlights the strong relationships that Northam has developed and maintained with its industrial customer base over many years.
The average US dollar sales prices achieved during the year under review improved for most metals. Palladium and rhodium both performed well, increasing by 52.4% and 169.8%, respectively. Both these metals continued their upward trends subsequent to the financial year end.
Platinum however, making up roughly 60% of the sales volume of Northam’s precious metals 4E basket, continues to be the laggard. The average price achieved during the year was USD858/oz (F2019: USD824/oz), which impacted the 4E basket price achieved.
Platinum now only contributes 28.0% (F2019: 46.3%) to the 4E basket. Any upward movement in the platinum price will have a positive impact on the profitability of the group.
The group continues to deliver on its strategy of developing low-cost, long-life assets which are positioning the group for further strong financial performance even in subdued or potentially volatile commodity markets.
