• EPS expected to decline by 40-46% YOY
  • HEPS projected to decrease by 46%-51%
  • Production is expected to decrease across all units

 Harare- Mimosa mine’s parent company, a multinational mining and metals processing Group, Sibanye Stillwater has slashed its full-year 2022’s profit guidance due to industrial action, floods that stalled production for seven weeks and a more challenging operating environment infested by a weakening Rand. 

About 31 000 workers at South Africa's biggest mining employer were on strike from March 10 up to June 2022 demanding higher wages. As the strike dragged on, Sibanye's first-quarter gold output plunged 45% to about 137,000 ounces from the same period a year earlier forcing the Group to reduce FY output guidance for its operations.

The Group expects Earnings Per Share (EPS) for the year ended 31 December 2022 to be between 618 cents (SA cents) and 683 South African cents down from 1140 cents for the full year 2021.

Headline Earnings Per Share (HEPS) are projected between 619 cents and 684 cents down from 1272 cents for the full year 2021.

This represents a 40% to 46% decline in EPS year-on-year and a 46% to 51% decline in HEPS respectively. 

“The decrease in EPS and HEPS for 2022 compared to 2021 is primarily due to the three-month industrial action related to wage negotiations in the South African gold sector and a severe weather event in Montana that resulted in the Stillwater operations being shut down for 7 weeks,” sthe Group’s CEO, Neal Froneman said in a statement accompanying the trading update.  

Production from the SA PGM operations at 1 730 808 4Eoz was marginally below the lower end of annual guidance for 2022 due to the ongoing impact of load curtailment, copper cable theft and proactive safety-related stoppages. 

“Pleasingly, stockpiled ore containing approximately 33,000 4Eozaccumulated by the end of Q3 2022 due to intensified load curtailment impacting concentrator capacity across the SA PGM operations was largely processed during the year-end holiday period in December 2022,” Froneman said.

South Africa’s gold operations (excluding DRDGOLD) were suspended for three months during H1 2022 due to industrial action which together with a subsequent gradual ramp-up in production during H2 2022 resulted in a 50% decline in production to 13,736kg.

In US, mined 2E PGM production at 421,133 2Eoz was 5% below the lower end of annual guidance, reflecting the full impact of the flood event as well as ongoing operational constraints which contributed to the repositioning of the US PGM operations. 

Froneman said the implementation of the repositioned plan is in process, with production forecast expected to hit up to 700,000+ 2Eoz by 2027 once flexibility has been restored across the complex and the new cemented backfill plant at Stillwater East has been completed.

In the European region, the Sandouville refinery produced 6,842 tonnes of nickel (nickel salts production of 2,003 tonnes and nickel metal production of 4,839 tonnes) since the date of the acquisition on 4 February 2022. 

Sibanye-Stillwater will release its full operating and financial results for the six months and year ended 31 December 2022 on Tuesday, 28 February 2023.

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