RBPlat to report huge lift in basic interim earnings as PGM prices flourish

Steve Phiri, CEO, Royal Bafokeng Platinum

ROYAL Bafokeng Platinum (RBPlat) will report interim basic earnings as much as 450% higher year on year owing to improved prices for platinum group metals (PGMs) and higher production.

The company said in a trading statement today that basic earnings per share would be between 1,800 and 1,860 cents per share representing an increase of 433% and 450%. This compares to basic earnings of 338 cents a share last year.

Headline share earnings would be between 1,795 and 1,850 cents a share representing an increase of 435% and 452% year on year.

Earnings were also affected by the premium earned on the partial buy-back of convertible bonds and a deferred tax credit. In May, RBPlat announced it had mopped up the last of an R1.2bn convertible bond after converting 29,837 shares equal to around R298.4m. The bond was due to mature in March next year.

Prices for PGMs continued to flourish this year, especially the so-called minor metals rhodium and ruthenium, after strong performances in 2020. Anglo American Platinum said in a trading statement on Tuesday that platinum had averaged $1,170/oz in the first six months of its financial year – a 37% year on year increase.

The palladium price averaged $2,641/oz, an increase of 23%. However, it was rhodium that stood out: although a minor metal in terms of its portion of total PGM production, it averaged $24,377/oz – an increase year on year of 171%, said Amplats.

Market strength of this nature is good news for RBPlat shareholders which were told in February their company would pay a maiden dividend for its 2020 financial year of 575 cents per share – about 50% of free cash flow before expansionary capital.

As of the first three months of its 2021 financial year, RBPlat was net cash to the tune of R3.9bn, a more than doubling over the R1.64bn position as of December 31.

It forecast an increase in production of platinum group metals by as much as one quarter to between 475,000 to 525,000 PGM ounces.

This was on the back of 1,354.4 cents per share in headline earnings for the 12 months ended December and compared to 50.4 cents/share previously. The group ended the year on December 31 with net cash of R2.24bn compared to R814.2m at end-December 2019.

The company is due to release its results for the six months ended June on August 3.