RBPlat headline earnings rise
Royal Bafokeng Platinum (RBPlat) expects headline earnings per share to soar between 196.2% and 209.4% in the year ended December 2016, compared with a headline loss per share in 2015.
The group says the expected increase is largely attributable to a 9.8% jump in revenue, mainly as a result of a higher realised basket price, combined with a nominal 0.6% increase in the cost of sales. But the market seemed unimpressed, with the stock falling 3.54% by the close on Thursday.
“The … announcement was disappointing … and came in below market expectations,” Mish-al Emeran, an equity analyst at Electus Fund Managers, said on Thursday, implying a disappointing operational performance during the second half of the financial year.
RBPlat said on Thursday that the rise in headline earnings per share was affected by the 2015 one-off current and deferred tax charge related to the settlement of a tax dispute and also the oneoff housing project tax credit accounted for during 2016.
But it also said that improved earnings, combined with strong cash flow from on-reef development revenue at the Styldrift I project, had resulted in a substantial cash balance at the end of the year.
“Cash preservation continues to be a priority and RBPlat remains unleveraged with a robust balance sheet, which positions it well for the next phase of Styldrift I’s ramp-up to a 150,000-tonnes/month operation,” the producer said.
RBPlat expects to release its results for the year ended December 2016 on or about February 28.
The miner said late in 2016 that it would triple production from the new Styldrift mine in response to higher rand platinum prices.
RBPlat, which was in a partnership with Anglo American Platinum at Styldrift and the Bafokeng Rasimone Platinum Mine (BRPM), said the companies would invest R4.75bn to ramp up Styldrift to 150,000 tonnes of ore a month from the 50,000 tonnes it had set as a first-phase target.
More recently, though, production at its main BRPM mine has been hampered by heavily criticised safety stoppages.