One-off costs stemming from its recent demerger from Anglo American have taken their toll on Valterra Platinum’s maiden first-half earnings.
Valterra’s balance sheet was hit by R1.4bn in one-off costs stemming from the demerger, as the former parent company narrows its portfolio to focus more on copper, iron ore and crop nutrients.
In total, Valterra has incurred R6bn in costs from its Anglo separation, R1.2bn of which is yet to reflect on the platinum group metal (PGM) miner’s balance sheet.
“While we’ve incurred a lot of the advisory costs and some of the corporate rebranding costs already, the rest of the separation costs for systems will come through in the second half of the year and in 2026,” Valterra CFO Sayurie Naidoo told Business Day.
“We’re still separating our IT infrastructure etc.”
For Valterra, the separation from Anglo came after an operationally challenging six months, with heavy rains in Limpopo forcing an unplanned pause at its Amandelbult mines in February.
All mines have since come back online, but the effect of the flooding on Valterra’s operational performance was significant, as laid bare in the interims.
In the six months to end-June, own-mined PGM production fell 12% from the previous first half, resulting in a 25% slump in PGM sales.
With demerger related costs, this drop in output resulted in headline earnings per share (HEPS) being 81% lower at R4.73 compared with the previous year. Earnings before interest, tax, depreciation and amortisation fell by nearly half to R6.6bn.
CEO Craig Miller was optimistic that the costs arising from the group’s Anglo demerger had been well-spent, enabling the company to set itself up as an independent company.
“We have reconstituted an independent and diverse board of directors and have made significant progress in transitioning from Anglo’s centralised services,” said Miller.
“Transitional service agreements are in place for some services, while other expertise and skills have been recruited into the company as part of our target operating model.”
The group has also enjoyed a warm welcome on the London Stock Exchange (LSE), where it debuted its secondary listing in early June. Shares in the miner have climbed about 18.5% to £36.50 in the less than two months since it listed on the LSE.
“It’s fair to say that it’s gone particularly well,” Miller told Business Day, reflecting on the group’s LSE performance so far.
“The majority of people who owned Anglo shares and received Valterra shares seem to have retained their ownership, so a lot of the risk around flow-back has really settled down and the shareholder register is in line with our expectations.
“Being an independent, stand-alone, world-class PGM producer is attractive to shareholders,” he said.
The group’s share price has also been supported by a recent surge in PGM prices, with platinum and palladium ending their three-year decline in recent months. The metals have gained about 56% and 40% respectively since end-December.
PGM prices have been boosted by the shift from pure battery electric vehicles to hybrid electrics, lifting demand for the metals while mined supply remains constrained by SA’s energy and logistics challenges. The country produces about 80% of the world’s platinum.
“This time last year, people were forecasting that about 40% of vehicle sales would be battery electric vehicles by the end of this decade. That has been revised downwards to about 30% today.”
“Because of where prices were historically, you have had underinvestment in the PGM sector. As a result, you’re going to see continued and sustained deficits for PGMs, which will translate to higher prices.”
Geopolitical tensions and trade wars have made PGM prices volatile this year. As metal markets remain uncertain, some executives, such as Northam Platinum CEO Paul Dunne, have warned industry players not to count their chickens before they hatch.
However, recent reports by the World Platinum Investment Council suggest that the metal’s forecast market deficits, projected at 966,000 ounces this year, are here to stay.
“Looking ahead, with the spot price of platinum rising by more than 50% year to date and an expected recovery in metal sales volumes, there is a strong chance that [Valterra’s] earnings will improve in the latter half of the year,” said Ashburton Investments equity analyst Garth Barry.
The group maintained its full-year production guidance, with the ramp up of operations at Amandelbult and cost saving measures expected to lift output in the second half.
An interim dividend of R2 per share was also declared in line with the company’s policy.
Update: July 28 2025
This story has been updated with new information.
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