Impala Platinum (Implats), the third-largest source of SA platinum group metals (PGMs), has flagged an at least R3.2bn rise in headline profits for its year to end-June, boosted by higher production and elevated precious metal prices.
Refined output of the six PGMs Implats produces rose 16.3% to 3.271-million ounces to end-June, while revenue ounce sold is expected to increase 58.8% to R39,478/oz. This reflects high prices during the period, including records for palladium and rhodium, Implats said in a trading update on Wednesday.
Implats said “a significant” increase in the dollar basket price for PGMs, together with higher sales volumes, resulted in an improvement in revenue and improved profitability for the period.
Sales volumes rose 17.2% to 3.274-million ounces, with the group running down stocks of ruthenium as demand and pricing strengthened during the period.
Headline earnings, a widely used profit measure in SA, is expected to rise at least 20% from the R16bn reported previously, the group said, adding that it expects to release a more detailed trading update when it had more certainty about its performance.
Group capital expenditure is expected to increase to about R6.5bn, from R4.5bn previously, with the period affected by Covid-19 restrictions.
“The increased spend for the period was due to the higher operating rates achieved, the inclusion of Impala Canada for a full reporting period and the acceleration of spend at Zimplats following approval of the Mupani and Bimha expansion projects,” the company said.
Implats shares were trading 2.69% higher at R254.98 on Wednesday, having risen by three-quarters since the beginning of 2020.
Platinum miners have been cashing in on surging PGM prices amid robust demand even as Covid-19 constrained supply, with Anglo American Platinum (Amplats), which is one of the world’s largest suppliers of PGMs, declaring a record dividend on Monday for its six months to end-June. Amplats declared a number of financial records for the six months to end-June, with a R46.4bn payment to shareholders in the form of a base and special dividend.
The R46.4bn payout from Amplats, consisting of a base dividend and special dividend, represented a payout ratio of 100% headline earnings, which had more than sextupled.
Update: July 28 2021
This story has been updated with new information throughout.
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