RBPlat to register full year earnings lift of up to 78%

ROYAL Bafokeng Platinum (RBPlat), currently the subject of a takeover offer by Impala Platinum (Implats), forecast an increase of up to 78% in basic headline earnings for the 12 months ended December 31.

Among the factors influencing the year-on-year improvement was an increase in 4E platinum group metals (PGMs) of 11.5% and an increase in platinum of 10.7% compared to 2020 when it produced 419,000 ounces in PGMs last year.

The company previously guided to PGM production of 475,000 to 525,000 oz for the 2021 financial year representing an increase of 25% assuming the higher end of the estimate.

According to RBPlat’s trading update today, basic earnings would be as much as R24.14 per share at the high end of estimations.

Other factors behind the earnings lift was “favourable” PGM market conditions, an increase in royalty income from Implats, and a deferred tax credit. On the flip side, RBPlat also paid a premium on the partial buy-back of its convertible bonds.

The company plans to publish its full year numbers on March 8 which is likely to give a platform for questions over the Implats offer and the 34.9% stake bought in the business by Northam Platinum.

Earlier this month, an independent committee appointed by RBPlat said that the Implats offer – consisting of R90 per share in cash and 0.3 Impala shares per RBPlat share – was fair value.

Implats’ offerfor RBPlat becomes wholly unconditional on May 30. The offer closes on June 17. The circular – issued on January 17 – also sets down the required conditions precedent including approvals from such bodies as the Competition Commission.