ROYAL Bafokeng Platinum (RBPlat) yesterday delivered record production and earnings bolstered by metal prices for the 12 months ended December, despite the Covid-19 pandemic and unreliable Eskom power supply.
The platinum group metals company reported a 28.3 percent increase in earnings before interest, taxes, depreciation, and amortisation to a commendable R8.5 billion in 2021. Headline earnings jumped 86 percent to R6.48 billion.
The RBPlat board declared a gross cash final dividend of 535 cents a share, equating to R1.5bn. In August 2021, the group declared an interim dividend of R1.5bn, bringing total capital returns for the year to R3.5bn.
“Our robust balance sheet and capital allocation discipline provide a platform for the enhancement of stakeholder value and sustainable capital returns to shareholders,” the company said.
RBPlat chief executive Steve Phiri said: “Our response to the fluid operating environment continues to deliver growth during a period where the mining industry has been focused on stability and recovery.
“This growth was driven by our shared vision of success, fostered through transparent and collaborative partnerships with our stakeholders.”
The group flagged its net cash amounted to R4.9bn, a 198.1 percent improvement compared to 2020 in the same period.
Group capital expenditure (capex) is forecast to be R2.3bn with Styldrift mines replacement capital at R0.7bn, the Maseve plant upgrade, and the tailings storage facility upgrades R0.5bn, and the Styldrift expansion project auxiliary works at R0.2bn.
Stay-in-business capex is expected to be between 10 and 11 percent of operating expenditure.
Phiri said the total tons hoisted increased by 12.1 percent to 4 639 000 tons compared to 2020.
Bafokeng Rasimone platinum mine (BRPM) tons hoisted increased by 11.9 percent to 2 434 000 tons, and Styldrift tons hoisted increased by 12.2 percent to 2 205 000 tons.
Merensky tons milled increased by 7.9 percent to 3 546 000 tons, as Upper group two (UG2) reef tons milled increased by 53.7 percent to 1 082 000 tons, in line with increased UG2 volumes from BRPM North and South shafts. The JSE-listed company reported one fatality that occurred at BRPM’s North shaft, caused by a fall of the ground incident.
Integral Asset Management mining analyst Bruce Williamson said BRPlats delivered good operational results.
“The ounces produced was up 11 percent, that was positive. Half of the reason the company performed well was the move to divide the mines into two; the old, original Bafokeng Rasimone platinum and the new area is Styldrift.
“They continued to finish the capital project at Steldrift and now they have been increasing some production,” he said. The company could have performed better if it wasn’t for the final quarter where the Covid-19 pandemic was rampant.
Williamson said the market was concerned that the Russian PGMs might not get out into the market and they pushed up prices due to Russia’s invasion of Ukraine.
“This is probably accurate, while there is no actual ban on Russian commodities to date, nothing is official.”
BRPlat is involved in a takeover battle where the miner’s parent company Royal Bafokeng Holdings (RBH) sold its 32.8 percent stake in RBPlat to Northam Platinum at R180 a share.
This happened after Impala Platinum (Implats) and RBPlat announced they were in talks. Implats bought a 24.5 percent stake in RBPlat, for R90 cash per share plus 0.3 ordinary shares.
Meanwhile, RBPlat last month advised their shareholders to accept a mandatory more than R40bn offer from Implats after Implats announced in December that it had already acquired 35.2 percent of RBPlat.
During the presentation of the results, Phiri said RBH had squandered a golden opportunity to be a catalyst for consolidation.
“Not only had RBH sold out of its defensive role as a shareholder in the company that it created, but it had sold out to, and into, one of our best competitors, and abandoned shareholders who, by investing alongside RBH, had made an enormous contribution to the formation, growth, and maturity of RBPlat,” he said.
dieketseng.maleke@inl.co.za
BUSINESS REPORT ONLINE