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Sibanye-Stillwater expects 47% earnings per share decline in H1 2022 as gold production down 77%

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(Kitco News) - Sibanye-Stillwater (NYSE: SBSW) today reported that in H1 2022, its 4E PGM production from operations in South Africa (including purchase of concentrate) of 849,152 4Eoz was 9% lower than in the comparative period of 2021.

The company said that a 9% decrease in underground 4E PGM production to 751,717 4Eoz was partly offset by a 6% increase in surface production of 72,089 4Eoz, with third-party purchase of concentrate treated at the Marikana smelting and refining operations of 25,346 4Eoz, 27% lower due to the winding down of two third party purchase of concentrate contracts in Q4 2021.

The company added that H1 2022 mined 2E PGM production from the US PGM operations of 230,039 2Eoz (H1 2021: 298,301 2Eoz) was 23% lower year-on-year primarily due to the temporary cessation of operations at the Stillwater mine following the regional flooding in Montana on 12 and 13 June 2022 and mining flexibility and labour constraints which continued to impact productivity at both operations.

Importantly, the company’s production from the SA managed gold operations (excluding DRDGOLD) decreased by 77% in H1 2022 to 3,128kg (100,568 oz) compared with H1 2021 due to no material gold production occurring during the three-month industrial action and from the Beatrix operation during Q1 2022, due to the suspension of processing operations to allow for precautionary reinforcement and buttressing of the Beatrix TSF from 28 December 2021.

The company also reported that earnings per share (EPS) and headline earnings per share (HEPS) for H1 2022, are expected to be between 402 SA cents (26 US cents) and 447 SA cents (29 US cents) compared with EPS and HEPS of 843 SA cents (58 US cents) for H1 2021, representing a decline of 47% to 52% compared to H1 2021.

The company explained that the decrease in EPS and HEPS for the period compared to the comparative period in 2021 is primarily due to the reduction in gold production from the SA gold operations, lower production from the US PGM operations, and lower relative precious metals prices.

Sibanye-Stillwater is a multinational mining and metals company with a diverse portfolio of mining and processing operations and projects and investments across five continents. The company is also one of the foremost global PGM autocatalytic recyclers and has interests in leading mine tailings retreatment operations.

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