Implats to post fourfold lift in interim earnings as PGM basket price heads north

Nico Muller, CEO, Impala Platinum

IMPALA Platinum (Implats) will post more than a fourfold increase in interim headline share earnings of between 1,812 to 1,899 cents, the company said in a trading update today. Interim headline share earnings for the previous financial year were 436 cents.

“Robust dollar pricing for PGMs (platinum group metals), together with rand depreciation and sustained operational delivery, has resulted in higher revenues received by the group during the period,” Implats said.

The group also said that production of 6E PGMs (platinum, palladium, rhodium, iridium, ruthenium, and gold) would increase by 9% to 1.68 million ounces. The increase was partly down to the inclusion of production from Impala Canada. Implats bought North American Palladium in 2019 for R11.4bn in cash.

Group refined 6E production for the six months is expected to increase by 29% to 1.69 million oz from 1.32 million oz.

The increase in refined 6E production is due to constrained processing capacity in the comparative period when planned smelter maintenance resulted in a stock build-up, said Implats. In addition, reported volumes in the period benefitted from the inclusion of saleable production from Impala Canada, it added.

Increased metals prices, especially for rhodium, have been the wind beneath the wings of nearly all PGM producers. As a result, the market is expecting companies like Implats to produce windfall profits and payouts.

Nico Muller, CEO of Implats, said in September that: “I have got no doubt the markets will remain robust. Our dividend policy is a minimum of 30% of free cash flow pre-growth, and in the absence of growth opportunities, I am doubtful the distribution policy will remain at 30%. It is highly likely it will be increased.”