The interim profit of Sibanye-Stillwater, one of the world’s biggest precious-metals miners, fell more than a third as there was a slowdown in global growth, which reduced demand for commodities, leading to lower prices.
The company, valued at about R89.3bn on the JSE, reported a profit of R7.8bn in its results for the six months to end-June, down about R4.6bn from the R12.3bn reported in the same period in 2022.
Headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, more than halved to 208c per share.
“The operating environment has been equally demanding, with regional factors in our operating jurisdictions posing significant challenges,” CEO Neal Froneman said.
“These regional factors include some which we have previously highlighted as ‘grey elephants’ (highly probable, high-impact yet often ignored global trends)” he added, pointing to climate change, social discontent, and community and labour protests in SA.
The higher gold price in rand terms helped somewhat to offset the lower platinum group metals (PGMs) prices, but many miners have recently reported a drop in profit as PGM prices dropped from the record-highs seen during the Covid-19 pandemic.
To offset the effect of problems in one country or price declines of some metals, Sibanye has diversified what it produces and where it operates. This includes investment in metals in Europe, the US and Australia that can be used in the green economy as the world looks to minimise the impact of climate change.
“These strategic investments are expected to make an increasing financial contribution to the group in the second half of this decade,” Froneman said. “We anticipate that these strategic investments will provide a critical offset against the declining contribution from the SA gold operations as they near the end of their reserve lives over this decade and are restructured in a phased manner.”
Revenue declined 14% to R60.6bn and adjusted core earnings (ebitda) more 37.3% to R14.1bn.
The miner declared an interim dividend of 53c per share, amounting to R1.5bn. This is more than half of the 138c per share a year ago, but in line with its policy of paying out 35% of normalised earnings.
The production 4E PGM — platinum, palladium, rhodium and gold — was down 3% to 24,857kg in Southern Africa region, but the average basket price fell more than a fifth to R34,006/oz and total costs, also known as all-in sustaining costs, rose 8.6% to R19,716/oz.
Gold production in the Southern Africa region more than doubled to 12,962kg, while the average gold price was up more than a fifth to R1.12m/kg and the total costs dropping 31.2% to R1.06/kg.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.