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Implats says its half-year earnings impacted by lower refined PGM production, inflation and rand depreciation

Kitco News

(Kitco News) - Impala Platinum (JSE: IMP, Implats), a leading producer of platinum group metals (PGM), reported today that for the half-year ended 31 December 2022 (HY22), its 6E PGM in concentrate production unchanged y-o-y and amounted to 1.62 million ounces.

However, the company's refined 6E PGM production, which includes saleable ounces from Impala Canada, was impacted by scheduled processing maintenance and ongoing power disruptions in South Africa and declined 9% y-o-y to 1.48 million ounces in HY22.

The company’s revenue of R57.8 billion increased by 4%, cost of sales of R40.6 billion increased by 8% and Implats delivered gross profit of R17.2 billion; EBITDA of R24.5 billion was achieved at an EBITDA margin of 42%.

Basic and headline earnings increased by 1% both to R14.0 billion; however, basic and headline earnings per share of 1 648 cents per share and 1 654 cents per share were 3% and 2% lower, respectively.

The company said that the weighted average number of shares in issue increased by 30.2 million to 847.6 million, with the total number of ordinary shares increasing to 852.7 million shares at period end, including treasury shares.

“A total of 2.5 million Implats shares, with a fair value of R454 million, were issued as part settlement for acquiring an additional 8.4 million RBPlat shares in the period,” Implats added.

The company also announced that its board of directors declared an interim dividend of 420 cents per share.

“The Group’s financial performance was supported by robust rand PGM pricing and destocking refined metal inventory to offset the impact of lower refined volumes, and was hampered by broad-based inflationary pressures and a marked rand depreciation,” it said.

Implats noted that its planned production in FY2023 remains within the boundaries of previously provided key guidance parameters. Group 6E refined production in FY2023 is estimated to be between 3.0 and 3.15 million ounces.

Implats also said that PGM markets are expected to tighten during 2023, as auto production progressively recovers from recent supply chain constraints, China moves away from its zero-Covid policy and industrial demand remains resilient.

Implats is a leading producer of platinum group metals. The group is structured around six mining operations and Impala Refining Services, a toll refining business.

The company's operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe – the two most significant PGM-bearing ore bodies in the world – and the Canadian Shield, a prominent layered igneous domain.

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