NORTHAM Platinum reported a sharp rise in annual profit after higher platinum group metal prices lifted revenue and cash generation, allowing the miner to declare a record final dividend of R10 a share, up from R2 a share last year.
Together with the R7 interim dividend, Northam’s total dividend for the year amounts to R17 a share. The board also increased its minimum annual dividend payout to 40% of headline earnings from 25%.
Headline earnings per share surged 699% to 3,044.2 cents from 380.8 cents a year earlier.
Revenue for the year ended June rose 64.1% to R54bn from R32.9bn, while operating profit increased to R14.2bn from R3.6bn.
The improvement was largely driven by higher metal prices, with Northam’s achieved rand 4E basket price increasing 57.4%, while metal sales rose 8%.
This more than offset a 36% increase in cost of sales to R39.85bn from R29.31bn.
Northam generated R17.6bn in cash from operations, up from R5.3bn, while cash expenditure on expansion and sustaining capital amounted to about R5.9bn.
Cash and cash equivalents almost doubled to R13.7bn from R6.9bn at year-end. The group ended the period with a net cash position of R2.7bn, while its available banking facilities remained undrawn.
Northam has also set a new medium-term growth target under Vision 2031, which aims to increase sales to more than 1.5m ounces of PGMs and 2m tonnes of chrome concentrate over the next five years.
The plan combines further development of its existing assets with growth in third-party processing and will require further capital investment, including upgrades to downstream processing facilities.
Northam has also been in focus this week after receiving an unsolicited, exploratory and non-binding approach from a major South African PGM producer regarding a possible transaction. The company subsequently started a process to consider potential proposals.
The approach has added to interest in the stock, with Northam’s share price gaining 5.49% over the past seven days.
