Impala Platinum expects its interim profits to surge by 300 percent |

SOUTH Africa's Impala Platinum (Implats) expects interim earnings to surge by more than 300 percent for the six months ended December on the back of record platinum group metals (PGMs) prices and the weaker rand.

“Robust dollar pricing for PGMs, together with rand depreciation and sustained operational delivery, has resulted in higher revenues received by the group during the period,” Implats said in a trading update yesterday.

Implats expects headline earnings of up to R14.78 billion in the interim period surge up to 338 percent from R3.378bn a year earlier.

Implats, which operates mines in South Africa, Zimbabwe and Canada said headline earnings a share would jump by between 316 and 336 percent to between 1 812 cents and 1 899c per share compared to the 436c per share in the comparative period.

The increase in earnings was partially offset by a R1.5bn once-off noncash, or 194c per share, which had no tax impact, arising on the Marula black economic empowerment loan refinancing.

Implats said basic earnings for the period were expected to increase by between 627 and 647 percent to between R24.74bn and R25.42bn compared to R3.40bn in the comparative period. But Anchor Capital investment analyst Seleho Tsatsi said Implats could have done better.

“Although it was eye-catching on an absolute basis, the Implats trading statement came in a bit below expectations,” Tsatsi said. Tsatsi said Implat's peer Sibanye-Stillwater's earnings went from a R0.40 loss in 2019 to R10.68 in 2020 reflecting a noteworthy turnaround in earnings.

Tsatsi also said Anglo American Platinum earnings growth in 2020 was affected by the explosion at its converter plant last year.

The group also flagged higher output with a 29 percent increase in refined 6E production to 1.694 million ounces from 1.317 million ounces in the comparative period. “The increase in refined 6E production is primarily due to constrained processing capacity in the comparative period when planned smelter maintenance resulted in a stock build-up,” said Implats.

Concentrate 6E production for the period was expected to increase by 9 percent to 1.684 million ounces from 1.539 million ounces for the six months ended December, 31, 2019 as volumes benefited from the inclusion of production from Impala Canada.

Implats shares closed 0.05 percent lower at R217.50 on the JSE yesterday.