Sibanye-Stillwater, the world’s largest primary producer of platinum, will pay an interim dividend of R2.92 per share after reporting a record profit in the first half of its financial year on the back of strong precious metals prices.
An improved operational performance paired with “considerably higher commodity prices” resulted in group profit for the half year through June, more than doubling to R25.32bn compared with R9.73bn reported in the same period a year earlier, and surpassing the previous high of R20.89bn in the second half of 2020, CEO Neal Froneman said in a statement.
Normalised earnings of R24.41bn were 176% higher year on year.
Increased output at its SA platinum group metals (PGMs) and gold operations reflects a sustained recovery from the Covid-19 disruptions experienced in 2020, though production at the group’s US PGM operations were flat.
The total dividend payout of about R8.54bn is equivalent to 35% of normalised earnings and at the upper end of the range specified in the group’s dividend policy, Froneman said.
The stellar results enabled Sibanye-Stillwater to make significant investments in high-return brownfields projects to sustain its SA PGM and gold operations, he said. Gross debt was also reduced by 44% to R15.9bn at the end of June from R28.14bn a year earlier.
A share buyback programme announced in June 2021 would provide additional value, in line with the group’s stated intention to return surplus capital to shareholders, Froneman said.
“The approximately R9.6bn share buyback programme for 5% of shares in issue should, once completed, further enhance shareholder returns through higher dividend payouts to remaining shareholders, as well as improving the net asset value per share,” he said. “Together with the interim dividend declared, this could result in an annualised total return to shareholders of 15% for 2021.”
Correction: August 26 2021
This article was corrected to show the results figures in billions instead of millions
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