RBPlat next platinum group metal miner in line to produce bumper lift in earnings

ROYAL Bafokeng Platinum (RBPlat) looks set to be the next major beneficiary of vastly improved platinum group metal (PGM) prices over the last 12 months.

The company said in a trading statement today that full year share earnings would be between 1,366 and 1,371 South African cents per share for its 2020 financial year. This compares to earnings of 26.3c/share for the 2019 financial year.

Headline earnings per share were expected to come in between 1,347 to 1,357c/share compared to 50.4 cents for the previous corresponding period.

The company said it had lost 45 days of production as a result of the hard lockdown imposed by the South African government in an effort to stem the spread of Covid-19 in March and April last year. Nonetheless, PGM 4E and platinum production increased 4.5% and 4.2% respectively.

“The growth in the business and improved market conditions supported significant growth in revenue and operating profit,” the company said in the trading statement. “Revenue increased by more than 70% and earnings before interest, tax, depreciation and amortisation (EBITDA) increased by over 200%.”

South African platinum producers have posted bumper profits and significant increases in payout to shareholders over the last two weeks following strong pricing in 2020, which is expected to continue into this year.

Anglo American Platinum, Impala Platinum and Sibanye-Stillwater – the three largest PGM producers in South Africa – have also announced production increases totaling on a gross basis, some 1.2 million ounces in PGMs over the next four to five years.