Impala Platinum (Implats), a major platinum group metals (PGM) producer, on Friday flagged that it expects a decline in earnings for the year ended June 30 on lower production as it faced several operational challenges.
Implats said on Friday that its headline earnings, which exclude the impairment reversals in the comparative period, would be 8 percent to 16 percent lower, falling to between R30.5 billion and R33.5bn.
Headline share earnings will be between R36.69 to R40.30 per share.
Earnings in the period were adversely impacted by the combination of lower sales revenue and inflationary pressures on operating costs, the group said.
Implats said its concentrate production declined by 3.6 percent to 3.17 million 6E PGM ounces compared to the previous year.
Revenue per 6E ounce sold was expected to decline by 4.5 percent to R37 703 per ounce, reflecting the impact of weaker dollar pricing for our primary products.
"Implats navigated several operational challenges during the period. Extended safety stoppages, intermittent industrial action, and power-supply interruptions at Impala Rustenburg had a notable impact on production, while ongoing supply-chain constraints hampered operational continuity at Impala Canada.
"Marula delivered a record performance in the period, while Zimplats sustained production levels despite a complex operating environment and increased project activity," the group said.
Gross refined volumes, including saleable production from Impala Canada, were impacted by lower concentrate production and the extended maintenance required on the Number 3 Furnace at Impala Rustenburg. Consequently, gross refined volumes declined by 5.6 percent to 3.09 million 6E ounces.
"Refined volumes in the comparative period benefited from increased availability of processing capacity due to the timing of annual processing maintenance," the group said.
Group capital expenditure was expected to increase to R9.1 billion from R6.4 billion in the comparative period.
"This is due to accelerated project spend at Zimplats and Group processing assets, together with an overall increase in capital spend across the operations. Spend in the comparative period was constrained by Covid-19-related factors," the group said.
Implats is currently involved in a takeover bid of Royal Bafokeng Platinum (RBPlat), which the Competition Tribunal is sussing out.
The closing date on the Implats offer has been extended to September 16. As of June 30, Implats and Northam held 37.83 percent and 34.52 percent in RBPlat, respectively.
Meanwhile, the world's largest producer of PGMs Anglo American Platinum (Amplats) last month said that it had a 42 percent decline in interim earnings as a result of lower prices.
According to Amplats, in the PGM markets, the forecast was for platinum’s surplus to gradually move towards a deficit due to a significant increase in automotive platinum demand, as some platinum replaces palladium in gasoline catalysts.
Implats is set to report its full-year results on or about September 1.
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