Johannesburg – Sibanye-Stillwater in its trading statement and operating update for the six months ended 30 June 2021 (H1 2021 or the period) says that it expects more than 162% increase in profit attributable to the owners of the Group to between R24,588 million (US$1,690 million) and R25,084 million (US$1,724 million) for H1 2021, compared to R9,385 million (US$563 million) for the six months ended 30 June 2020 (H1 2020).
OPERATING UPDATE FOR H1 2021 COMPARED TO H1 2020
The Group again delivered a solid operating performance for the six months ended 30 June 2021, which underpinned the strong financial performance, ensuring leverage to higher precious metal prices and offsetting the impact of the 13% stronger rand against the US dollar.
4E PGM production from the SA PGM operations of 928,992 4Eoz was 41% higher than for the comparative period in 2020.
Mined underground 4E PGM production increased by 43% year-on-year, to 817,369 4Eoz, with 4E PGM production from surface 34% higher at 76,796 4Eoz and third-party purchase of concentrate treated at the Marikana smelting and refining operations, increasing by 29% to 34,827 4Eoz.
Mined 2E PGM production from the US PGM operations of 298,301 2Eoz (H1 2020: 297,740 2Eoz) was flat year-on-year due to a 21-day safety related work stoppage in June 2021, which reduced production by approximately 20,000 2Eoz. Recycling increased marginally to 402,872 3Eoz.
Production at the SA gold operations (including DRDGOLD) increased by 29% to 16,138 kg (518,848 oz) compared with H1 2020.
The significant increase in profit attributable to owners, basic earnings and headline earnings for the period compared to the comparative period in 2020 is mainly attributed to the following:
- Higher production from both the SA PGM and SA gold operations following the COVID-19 hard lockdown that impacted the operations in H1 2020 and successful measures which were implemented to reduce the impact of the ongoing pandemic on continued production
- A higher average PGM basket price
- Lower outstanding debt resulting in a decrease in finance expenses
These increases were partially offset by the following:
- Higher mining and income taxes due to increased profitability
- Higher royalty taxes for the South African operations mainly attributable to the increase in revenue
- An increase in fair value losses on financial instruments
- Loss on initial recognition of the Marikana BEE cash-settled share-based payment obligation, following the Marikana BEE restructure transaction
- A 13% strengthening of the R/US$ exchange rate