SIBANYE-Stillwater is to post an attributable loss of at least R4.6bn, equal to $350m, for its 2017 financial year ending December 31, the Johannesburg-listed precious metals firm said today in an announcement.
On a share earnings basis the loss will be at least 235 cents, or 18 US cents, and a headline loss per share at least 110 cents, or 8 USc/share. The share earnings loss was partly owing to a massive $1bn share issue which part funded Sibanye-Stillwater’s audacious $2.2bn takeover of Stillwater Mining.
But there were other factors at play for the expected loss in 2017.
There were impairments and a provision for occupational healthcare claims in the first half of its financial year, described by analysts, and the company, as “messy”. The impairments, which totalled R2.8bn, related to the proposed restructuring of the Cooke 1 to 3 shafts and Beatrix West. An announcement on the completion of this restructuring is imminent.
The healthcare claims consist of a R1.1bn provision for potential payments to former employees claiming to have suffered from silicosis contracted at the company’s mines. The interim results also included just two months of contribution from Stillwater’s operations.
Sibanye-Stillwater also said there was a gain on an acquisition which was recognised during the comparable period in 2016, as well as “… significant differences in commodity prices and the average rand:dollar exchange rate year-on-year”. A further trading statement will be released before Sibanye-Stillwater posts its year end figures on 22 February 2018.
Sibanye-Stillwater has rarely been out of the news in the last 12 months. On October 16, it said a R200m increase on proposed savings of R800m for its platinum assets would see it save 300,000 ounces of PGM production a year, as well as some 15,000 jobs attached to them around the Rustenburg area.
Just over 10 months ago, on December 9, Sibanye Gold announced the cash offer for Stillwater Mining. It was a transaction that made Sibanye the world’s third largest palladium/platinum producer and the fourth largest 4E PGM producer.
Neal Froneman, CEO of Sibanye-Stillwater, told Miningmx on October 24 that the acquisition served notice that the group had turned its attention to growth after first surprising the market several years ago by becoming a high-yield, dividend payer when other companies were restructuring their balance sheets.
“When everyone stopped paying dividends because they were deleveraging, we were paying dividends,” he said. “It then became common wisdom that everyone was working towards paying dividends. We’ve now moved into a new phase. The market is not quite there yet, but that [phase] is growth,” he said.