Sibanye-Stillwater delivers record first quarter earnings

SIBANYE-Stillwater’s shareholders can expect to continue reaping rewards from the company’s foray into precious group metals (PGMs) following a record financial performance and improved output during the quarter ended March 2021.

Sibanye, the world’s leading precious metals producer, told shareholders yesterday that group adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) had jumped 78 percent during the March quarter 2021 quarter to R19.82 billion.

Chief executive Neal Froneman said the group’s South African PGM business had delivered another record financial performance during the quarter under review.

South African PGM posted a 90 percent increase in adjusted Ebitda to R15.2bn up from R8.04bn a year earlier as it benefited from the steep increase in PGM prices and a sound operational performance.

“Adjusted Ebitda generated by the SA PGM operations for this quarter, is higher than the total acquisition costs of these operations, emphasising the significant return on investment already delivered and the future windfalls stakeholders can continue to expect,” Froneman said, adding that with the 4E PGM basket having increased further during the second quarter of 2021, the outlook for the year was very promising.

SIbanye’s PGM portfolio includes the Kroondal and Marikana operations in South Africa, the Mimosa mine in Zimbabwe and the Stillwater mine in the US.

Precious metals prices remained strong during the quarter ended March 2021, with palladium and rhodium prices again reaching record levels, supported by ongoing supply disruptions and strong physical demand.

Sibanye’s South African gold operations also recorded a 5 percent increase in production reflecting the return to normalised production levels in November 2020, following the Covid19 disruptions that year.

However, underground production from the Beatrix gold mine fell by 11 percent mainly due to a slower-than-anticipated start-up post the December break, safety stoppages and temporary damage to infrastructure at Beatrix 4 shaft relating to a mud rush, which had since been repaired.

“Beatrix employs a higher proportion of foreign nationals primarily from Lesotho than the other operations, with Covid-19 related restrictions at border posts, affecting the return to work after the December break,” Froneman said.

Gold production from surface sources increased to 61kg (1 961 ounces) due to the higher gold price, while production from DRDGold was 3 percent higher at 1 382kg (44 432 ounces).

Sibanye, which was established after Gold Fields spun off its ageing South African gold operations, has seen a 500 percent share price spike since inception in 2013.

Sibanye closed 1.21 percent higher at R66.80 on the JSE yesterday.