Sibanye Stillwater reports significant decline year-on-year
Johannesburg: Sibanye-Stillwater will release its operating and financial results for the six months ended 30 June 2024 (H1 2024) on Thursday, 12 September 2024. Sibanye-Stillwater expects to report a loss per share for H1 2024 of between 250.8 SA cents (13.4 US cents) and 277.2 SA cents (14.8 US cents) compared with earnings per share (EPS) for the six months ended 30 June 2023 (H1 2023) of 262 SA cents (14 US cents), a more than 100% decline year-on-year.
EPS were significantly impacted by the impairment of property, plant and equipment from the US PGM operations amounting to R7,499 million (US$401 million), primarily due to lower medium- to long-term forecast consensus palladium price assumptions that resulted in a decrease in expected future net cash flows.
Headline earnings for H1 2024, which, inter alia, excludes the impairment, are expected to be positive. This however represents a decline of between 97% and 98% year-on-year.
This decrease for H1 2024 compared to H1 2023 is primarily due to:
- a significant decline in commodity prices, specifically platinum group metal (PGM) prices, resulted in a 28% lower average rand 4E* PGM basket price and a 30% lower average US dollar 2E* PGM basket price year-on-year, significantly reducing revenue. This revenue impact was partly offset by an 18% increase in the average rand gold price
- a 5% to 8% reduction in medium- and long-term market consensus palladium price forecasts assumed for fair value calculation purposes, led to a further impairment of the US PGM operations
- lower production and higher unit costs from the SA gold operations following the cessation of production from the Kloof 4 shaft during H2 2023; seismicity which restricted access to planned high-grade production areas at the Kloof and Driefontein operations; and, residual closure costs and restructuring at the SA gold operations and SA regional services during H1 2024
- production from the SA PGM operations was impacted by damage to surface infrastructure at the Siphumelele shaft, Rustenburg operation, which affected production from this shaft for two months, with the subsequent production buildup ongoing
The above-mentioned impacts were partially offset by the following:
- an increase in the net fair value gain on financial instruments compared to H1 2023, mainly attributable to a fair value gain on the derivative financial instrument portion of the convertible bond (CB) following shareholder approval for the issuance of new shares on 28 May 2024 for future settlement of the CB
- a decrease in royalties and mining and income taxes due to lower revenue and profitability, respectively
Sibanye-Stillwater is a multinational mining and metals processing group with a diverse portfolio of operations, projects and investments across five continents. The Group is also one of the foremost global recyclers of PGM autocatalysts and has interests in leading mine tailings retreatment operations.
Sibanye-Stillwater is one of the world’s largest primary producers of platinum, palladium, and rhodium and is a top tier gold producer. It also produces and refines iridium and ruthenium, nickel, chrome, copper and cobalt. The Group has recently begun to diversify its asset portfolio into battery metals mining and processing and increase its presence in the circular economy by growing its recycling and tailings reprocessing exposure globally.
