Impala Platinum (Implats) surprised investors with its first dividend payout in nearly two years, despite reporting a plunge in full-year earnings.
The group on Thursday declared a final dividend of 165c — a welcome surprise to its shareholders — in a move that signals the board’s confidence in the group’s prospects amid a resurgence in platinum group metal (PGM) prices.
Headline earnings for the year to end-June plunged 70% to R732m as lower sales volumes and muted rand PGM prices weighed on profitability.
In the previous financial year, the group skipped a final dividend payout amid stubbornly low PGM prices, which saw it retrench nearly 4,000 employees as part of a radical restructuring in early 2024. With market tightness persisting until early this year, the group decided not to declare an interim dividend for the six months to end-December.
Ashburton Investments equity analyst Garth Barry said the dividend declaration came as a surprise to investors and signalled a vote of confidence in the group’s prospects.
“The dividend comes as a sign of confidence in the group’s balance sheet, which shielded them from the weak metal price environment over the past few years. Refined metal volumes are guided to improve, which should help in unlocking cash from their high level of work-in-progress inventories,” he said.
The company’s improved outlook this year also comes from a recent rally in platinum prices, as SA’s dwindling supply of the metal worked its way into the market. After nearly three years of suppressed prices, platinum has soared more than 50% this year.
Still, the company reported a weaker operational performance in the year to end-June. Revenue was down 1% at R85.5bn after a 3% slip in PGM output to 3.55-million ounces. Implats delivered gross profit of R2.4bn, down 55.3%.
“Much of the decrease [in output] occurred in the second half of the year, which was a disappointment since management had guided to a stronger refined volume performance at the halfway point of the financial year,” said Barry.
Implats incurred R635m in restructuring costs at managed operations including a R440m provision for severance in respect of Impala Canada. It also had a R786m tax charge primarily due to not recognising deferred tax on the losses incurred by Impala Canada during the period.
Sustained operating momentum at Impala Rustenburg, Mimosa and Two Rivers will support group production in the 2026 financial year, while restored momentum at Zimplats and improved stability at Marula bode well for the group’s production outlook. Impala Canada’s volumes will decline in line with the planned end of commercial operations during the year.
Refined volumes are expected to benefit from improved annual processing availability at both Impala Rustenburg and Zimplats.
It has given refined and saleable production guidance of 3.4-million to 3.6-million ounces for 2026. Group unit costs are forecast to rise by 4%-9%.
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