Impala Platinum (Implats) expects to report a more than 20% drop in annual earnings as the operating environment in the 2023 financial year saw continuing headwinds and regional power constraints.
In its production update and trading statement for the year ended June 30, 2023, the group said yesterday that it was expecting headline earnings and headline earnings per share for the period to be at least 20% lower than those reported in the comparative period.
Headline earnings and headline earnings per share for the comparative period were R32 billion and 3 853 cents, respectively, it said.
Implats reported that sales volumes declined by 6% to 2.97 million 6E ounces, with limited destocking of refined metal inventories from an already reduced 2022 financial year base.
“Softer US dollar basket pricing was partially offset by the rand exchange rate weakening by 16%, resulting in a 4% decline in Group sales revenue to circa R36 120 per 6E ounce sold, it said.
Implats reported that the operating environment in the 2023 financial year was typified by continuing headwinds, and regional power constraints provided a notable impediment to operational continuity and delivery.
“While input pricing across key consumables eased in the latter half of the 2023 financial year, rand depreciation persisted, limiting the benefit to our South African operations, and adversely impacting the translated dollar cost and capital base of our Zimbabwean and Canadian assets,” it said.
Gross Group 6E production increased by 2% to 3.25 million 6E ounces from 3.19 million 6E ounces in the comparative period.
Implats reported that production from managed operations increased by 6% to 2.42 million 6E ounces. Impala Rustenburg increased production by 3% to 1.23 million stock-adjusted 6E ounces, despite the severity and frequency of load curtailment impacting operational continuity.
“Zimplats benefited from the commissioning of the third concentrator at the end of Q1 FY2023 and, despite the impact of lower grade and regional power disruptions, delivered a 5% increase in 6E matte production to 611 000 ounces.
“Operating momentum at Marula was negatively impacted by sporadic community unrest in the second half of the period, compounded by the impact of load curtailment resulting in a 7% decline from the record production achieved in FY2022, to deliver 6E concentrate production of 241 000 ounces,” it said.
Impala Canada delivered a 17% gain in 6E concentrate production to 291 000 ounces, with increased throughput of higher-grade underground ore.
“A maiden contribution of 43 000 6E ounces in concentrate from RBPlat was recorded for the 30 days to June 30, 2023,” it said.
During the period, Implats incurred a cash outflow of R4.9bn and issued 16.2 million shares to increase its aggregate holding in RBPlat from 37.83% to 56.41% on June 30, 2023.
“The financial results for the period will therefore include the consolidation of RBPlat results from June 1, 2023, including the subsidiary’s R4.5bn cash balance. Implats ended the period with a closing cash balance of R26.8bn.
“As at the date of this production update, Implats had acquired a further 123.4 million RBPlat shares, for a cash consideration of circa R11.1 billion and the issue of circa 37.0 million Implats shares, resulting in a 98.91% shareholding in RBPlat,” it said.
By 5pm the share price was 0.34% lower at R113.66 on the JSE yesterday.
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