Impala Platinum (Implats) has warned shareholders that it would report a loss in the year to end-June when it tables its results later this month, with the group set to write off R20bn in the value of its assets due to a plunge in platinum group metal (PGM) prices.
The impairment is more than a quarter of the group’s market capitalisation of R75bn. The mining house on Wednesday said that because of lower earnings, which took a haircut from the price plunge, coupled with a one-off R1.9bn broad-based BEE (BBBEE) charge the group expected its headline earnings to tumble by as much as 90%.
It expects to report headline earnings of R1.9bn-R2.8bn in the period, a far cry from the R32bn the group reported in the 2022 financial year.
Its basic earnings will be affected by the impairment, with the lion’s share of the impairment being a R16.5bn writedown of its Rustenburg operations.
The company expects to report a basic loss of R16.9bn-R17.8bn and basic loss per share of 1,883c-1,984c. In the previous year it reported basic earnings of R4.9bn.
In May it concluded a BBBEE transaction valued at about R9bn, the biggest empowerment deal so far in 2024. The transaction forms part of the merger approval conditions set in place for Implats’ acquisition of Royal Bafokeng Platinum in 2023.
The leading PGM producer reported a 13% increase in gross group 6E production, rising to 3.65-million ounces from 3.25-million ounces in the previous comparable period. The group said this growth was bolstered by the full consolidation of Impala Bafokeng, which contributed 483,000oz in concentrate.
Managed operations saw a 21% rise to 2.92-million ounces, with notable performances from Impala Rustenburg, which increased production by 4% to 1.28-million ounces; and Zimplats, which achieved a 6% increase in matte production to 646,000oz.
Sales volumes rose 16% to 3.44-million ounces, but revenue decreased 30% due to sharply lower average palladium and rhodium prices. Group unit costs per 6E ounce are expected to increase by 5.5%.
The period under review was marred by a tragic incident at the 11 Shaft, where on November 27 the fall of a lift resulted in the death of 13 employees and injuries to 73 others. The company said an additional six employees lost their lives in unrelated incidents at managed operations, bringing the group’s reported deaths to 19 for the year.
As a result, Implats’ fatal-injury frequency rate deteriorated to 0.127 per million man-hours worked, from 0.04 in the previous period.
In response to these tragedies, the company said it had intensified safety measures and investigations into the incidents were ongoing.
“Health and safety are a top priority for Implats’ management, teams and individuals. An increased focus on visible felt leadership and a safe work culture remain key to shifting mindsets, improving leadership and promoting a culture of safety adherence. The goal is to arrest the regrettable increase in fatal injuries and progress towards our zero-harm objective,” it said.
“With ongoing infrastructure repairs at the 11 Shaft and a focus on cost control, the company aims to stabilise production levels and improve financial performance in the coming periods.”
The audited results are set to be released on or around August 29.
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.