Implats rewards investors handsomely after a stellar half-year performance

Impats CEO, Nico Muller
  • Declares record interim dividend of R7.9 billion
  • Generated R20.1 billion of free cash flow
  • 6E refined production up 29%

HARARE – Benefiting from a high platinum group metals (PGMs) rand price, Impala Platinum Holdings (Implats) recorded a stellar half-year performance ending 31 December 2020, registering a surge in both profitability and production numbers.

Implats which owns 87% of ASX-listed Zimplats, the biggest PGMs miner in Zimbabwe declared a record interim dividend of R7.9 billion (R10 per share) after posting a 328% increase in headline earnings which is the biggest profit measure in South Africa to R14.4 million from R3.4 million recorded in the previous comparative period.

The Group generated R20.1 billion of free cash flow after a capital investment of R2.7 billion and ended the period with gross cash of R24.8 billion, net cash of R20.3 billion, and liquidity headroom of R28.5 billion.

Revenue for the period increased by 325% to R58.1 million from R28 million recorded in the same period last year while gross profit jumped 263% to R22.4 million from R6.2 million over the same period.

“Implats delivered stellar results for its half-year ended 31 December 2020 despite the challenges presented by navigating Covid-19,” Group CEO Nico Muller said in a statement accompanying the results.

“An improved safety performance underpinned operational momentum, while increased processing availability and the six-month inclusion of contributions from Impala Canada allowed the Group to deliver higher sales volumes into robust rand PGM pricing and achieve record financial results.”

Concentrate production at managed operations increased by 11% to 1.21-million six-element (6E) ounces, benefiting from the six-month contribution of Impala Canada, while the resolution of milling challenges experienced at both Mimosa and Two Rivers in the prior comparable period resulted in a 9% gain in 6E concentrate production volumes of 283 000oz from the joint ventures. Third-party 6E concentrate receipts of 196 000oz were 3% higher and gross 6E concentrate volumes rose by 9% to 1.68-million ounces.

Gross 6E refined production increased by 29% to 1.69Moz benefiting from improved availability at Group processing assets following scheduled maintenance in the prior comparable period and the contribution of saleable ounces from Impala Canada.

Meanwhile, inflationary pressures were compounded by the impact of the weaker rand on the cost base at Zimplats, additional expenditure due to Covid-19, the inclusion of the cash cost at Impala Canada, development to improve mining flexibility, and targeted spend on asset integrity at Impala Rustenburg.

For the full year, Implats is targeting output of up to 3.5 million ounces.

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