Implats full-year underlying headline earnings back to 2012 levels

Impala Platinum (Implats), the world’s third-largest platinum miner, will post its highest underlying headline earnings since 2012, fueled by higher metal prices and an operational turn around at its main Rustenburg mines.

Implats, which reports full-year results to end-June on September 5, said it would post headline earnings of between R2.9bn and R3.16bn, which translates to between 406c and 440c a share. Implats posted a headline loss of R1.23bn a year earlier, which equated to a loss of 171c per share.

To determine the underlying headline earnings per share (HEPS) by adding in the R1.56bn or 217c/share non-cash expense, related to a valuation of the dollar bond conversion exercise completed in July, would give a measure that could be applied to previous years, said spokesperson Johan Theron.

Tracking through the history of Implats’ HEPS, the last time it was above the 600c range — which is what the underlying headline earnings now top — was in 2012 when the company recorded 681c. “This has been a hell of a trend reversal,” Theron said.

For shareholders, who experienced negative headline earnings in the past two financial years, it is an indication that Implats has turned a corner on revitalising its core Rustenburg assets just in time to catch this year’s upturn in palladium and rhodium prices.

Under the leadership of CEO Nico Muller and Mark Munroe at the Rustenburg mines, safety and production have improved over the past year.

SA’s platinum miners generate a basket of six platinum group metals (PGM) and the two best performers have been palladium and rhodium, both used mainly to make automotive catalytic converters in petrol-powered engines.

The improved performance, which will be reflected as a post-tax profit, comes at the same time as the dominant Association of Mineworkers and Construction Union (Amcu) is pushing for higher wages with Implats and the world’s top two platinum miners, Sibanye-Stillwater and Anglo American Platinum, respectively.

Implats said its earnings were boosted by a 12% increase in platinum sales, which reached 1.52-million ounces and a 21% increase in palladium sales of 929,000 ounces.

Gross profit jumped to R6.8bn from R1.1bn the year before.

Basis earnings are forecast to be in a range of between R1.3bn and R1.65bn, equating to basic earnings per share of between 181c and 230c. Implats recorded a R1.66bn or 230c per share impairment of its partially developed and now mothballed Afplats mine.

A year ago, Implats recorded a basic loss of R10.7bn or 1,486c per share because of a R9.7bn impairment of assets. 

seccombea@bdfm.co.za