Nicola Mawson
Impala Platinum (Implats) expects to report a loss at the basic earnings-level of between R16.9 billion and R17.8bn in its full-year results, due to significant impairments totalling R19.8bn – most of which is the result of writedowns because of lower platinum group metals (PGM) rand pricing, it said yesterday.
This comes despite increasing production in the year to June, 2024. Electricity issues affected its Zimbabwe operations, and lower prices were achieved for each PGM ounce, with sharply lower average palladium and rhodium pricing. In dollar terms, it achieved 34% less revenue per ounce sold, which was partially offset by a 5% weaker rand.
Implats said it “navigated several serious challenges and a constrained operating environment to deliver guided production volumes and commendable cost controls” in the year.
While its local operations benefited from “a notable reduction in the frequency and intensity of load curtailment in South Africa”, increased electricity supply constraints were experienced in Zimbabwe. As a result, it lost an estimated 21 000 ounces, while another 12 000 ounces were deferred. Last year, it lost 36 000 production ounces, with 101 000 deferred.
Its biggest impairment was at Impala Rustenburg of R16.5bn with writedowns including goodwill, property, plant and equipment, and the prepaid royalty because of lower prevailing rand PGM pricing.
At the same time, Implats said in a statement released yesterday, a change in planned operating parameters implemented during the fiscal year meant it had to write down property, plant and equipment at Impala Canada by R1.6bn.
Other write downs included property, plant and equipment at the Mimosa joint venture of R686 million, partially due to lower rand PGM prices but also because of the deferral of the North Hill life-of-mine replacement project.
It also wrote down property, plant and equipment at the Two Rivers joint venture by R987m because of the combined valuation impact of lower prevailing rand PGM pricing and elevated near-term capital expenditure from the Merensky Project, which is currently under construction.
Implats said it saw a benefit from the consolidation of Impala Bafokeng and improved operations at its mining and processing facilities.
Gross group production increased by 13% to 3.65 million ounces from 3.25 million ounces in the prior period, with a 1% decline in like-for-like production. Production from managed operations increased by 21% to 2.92 million ounces.
Implats expects to report R14bn in capital expenditure, up from R11.5bn last year, which it said reflected “the consolidation of capital expenditure from Impala Bafokeng, higher levels of growth capital at Zimplats, and the impact of rand depreciation on the translation of foreign subsidiaries’ spend”.
Headline earnings for the period were impacted by a once-off, non-cash accounting charge of R1.9bn due to the implementation of its R9bn empowerment transaction in June, 2024. This was due to the facility Implats provided to empowerment parties, including Impala Bafokeng employees, Impala and Impala Bafokeng communities, and the strategic broad-based empowerment consortium, Bokamoso.
As a result, Implats’ headline earnings for the period are expected to decrease by between 85% and 90%, while headline earnings per share are set to decrease by between 86% and 90%.
By 4.51pm yesterday, the share price was up 1.75% to R83.14 on the JSE.
BUSINESS REPORT