Weaker metal prices weigh on Northam

Northam Platinum’s full-year headline earnings per share (HEPS) are expected to fall as much as 86.6%, despite higher sales volumes and increased revenue from chrome sales.

The group expected HEPS for the year to end-June to be 76.6%-86.6% lower at 324.3c-565.7c, it said in a statement on Wednesday.

Sales revenue declined 22.2% to R30.8bn due to a 35.5% decrease in the 4E (platinum, palladium, rhodium and gold) rand basket price to R24,178/oz and despite the 7.3% increase in sales volumes.

Gross profit is expected to be 68.8% lower at R4.8bn. Earnings before interest, taxation, depreciation and amortisation (ebitda), and excluding the loss on the sale of Impala Platinum shares  declined to R6.3bn from R16.5bn a year ago.

The group reported an 0.3% increase in equivalent refined metal produced from own operations to 892,876oz 4E, with a strong performance from all mines.

The platinum miner reported a 12.9% increase in 4E metal in concentrate produced from own operations at Booysendal and a 41.4% increase in 4E metal in concentrate from own operations and surface sources at Eland, it said.

Both equivalent refined metal production from own operations and equivalent refined metal purchased from third parties exceeded guidance.

The group said the results were underpinned by a solid performance from all operations within the group, particularly from a cost containment and increased production perspective.

The increase in group unit cash costs was limited to 4.3%, despite the trend of generally higher mining inflation. This achievement was primarily the result of increased mining production, improved concentrator feed grades and disciplined cost control.

Northam said global geopolitical and macroeconomic issues had the potential to cause further disruption to the platinum group metals (PGM) markets and metal prices, while the possibility of further load curtailment from Eskom could lead to additional operational disruption and challenges.

“We continue to monitor the market and have recently commissioned additional on-demand self-generation capacity at all our operations,” it said.

The development of an 80MW solar power facility at Zondereinde is in progress. Development is in collaboration with an independent power producer through a power purchase agreement. Power will be supplied behind the Eskom meter and will thus not be subject to load curtailment events.

Construction is scheduled to commence during the second quarter of the new year and commissioning is scheduled midway through 2026.

“This, together with the additional self-generation capacity, will enable unimpeded production under level 4 Eskom load curtailment conditions, which is equivalent to stage 6 load-shedding,” it said.

Northam will release its annual results on August 30.

mackenziej@arena.africa