Sibanye-Stillwater expects to narrow down its full year losses for 2024 on the back of an improvement in impairments and an increase in net gains on financial instruments after platinum group metal (PGM) production from South Africa soared by 48% while gold output dipped by 16%.

The company said Wednesday that losses per share for the year to December 2024 were likely to be between 245 South African cents and 271c per share. This represents an improvement on Sibanye-Stillwater’s loss per share for the year ended December 31, 2023 of 1 334c per share.

This improvement has been attributed to a profit realised in the second half year period to December 2024.

However, earnings per share for the full year were significantly impacted by a further impairment of property, plant and equipment from the US PGM operations amounting to R8.8 billion related to lower medium- to long-term forecast consensus palladium price assumption.

Headline earnings per share (Heps) in Sibanye-Stillwater for the full year, which exclude the impairment, are expected to be positive at between 63c and 67c compared to Heps for the prior year of 63c.

During the period under review, Sibanye-Stillwater was buffeted by continued lower average PGM basket prices received, which resulted in a 16% lower average rand 4E PGM basket price and a 21% lower average US dollar 2E PGM basket price year-on-year.

This resulted in lower revenues, offset by a 22% increase in the average rand gold price and additional revenue from the Reldan operations which were acquired effective March 1, 2024

There were also higher net costs of sales mainly at the South African PGM Marikana operations due to higher opening inventory levels and higher finance expense costs centred on increased borrowings at Keliber.

Sibanye-Stillwater’s PGM production from the SA operations of 1.83 million 4E ounces including attributable production from Mimosa in Zimbabwe as well as third-party purchase of concentrate was 4% higher year-on-year.

This includes 119 378 4E ounces attributable to the acquisition of Anglo American Platinum’s 50% share of the Kroondal pool and share agreement effective from November 1, 2023.

“This increase offset lower production from the Rustenburg operation, which was impacted by the collapse of the Siphumelele shaft ore collector bin and conveyor system, illegal industrial action at the Kroondal operation, and the restructuring and closure of high-cost and end-of-life operations at the Marikana and Kroondal operations in H1 2024,” said the company.

Bullion production from the SA managed gold operations, excluding DRDGold, declined by 16% to 16.9 tonnes mainly due to the closure of the Kloof 4 shaft and increased seismic activity at the Driefontein and Kloof operations, respectively.

“Lower PGM basket prices also reduced revenue, despite some offset from higher gold prices,” said Greg Davies, the head of wealth at Cratos Capital.

BUSINESS REPORT