Sibanye-Stillwater slumped nearly 7% on the JSE on Friday despite narrowing down losses for the year to December although it opted not to pay a dividend, with adjusted earnings before interest, tax, depreciation and amortisation from its South African gold operations surpassing that from its platinum group metals (PGM) activities in the country.
Market analyst Martin Rodgers said the gold and PGM company “dropped over 9% on their results” on Friday morning after profitability as expressed on an adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) basis “came in lower than analyst estimates and management decided to not pay” a final dividend.
Sibanye-Stillwater’s shares on the JSE fell 6.96% to R15.90 by the close of Friday’s trade session, extending its 9.45% and 16.05% weaker run in the past seven and 90 days respectively.
Due to an improved operating performance in the second half year period to December 2024 and 26% firming up in the average gold price received compared to the previous year, second half adjusted Ebitda for Sibanye-Stillwater’s SA gold operations increased by R2.5 billion to R3.6bn.
This was higher about R1bn compared to Sibanye-Stillwater’s adjusted Ebitda from its South African PGM operations over the same half year period. The company’s SA gold adjusted Ebitda accounted for 56% of group adjusted Ebitda.
“This was the first 6-month period since 2017 that adjusted Ebitda from the SA gold operations has exceeded the contribution from the SA PGM operations and marks a notable turnaround from previous years when the SA PGM and US PGM operations comprised 80%-90% of group earnings and sustained the group during a period when the SA gold operations experienced significant operational disruptions,” said Neal Froneman, CEO of Sibanye-Stillwater.
As a consequence of this, the company is now seeking to boost its SA gold operations. Froneman, who is retiring from Sibanye-Stillwater, said the company had now set its sites on reviving the Burnstone gold mine in Mpumalanga.
The SA PGM operations had an operating cost increase of 6% to R23 608 per 4E ounce in line with inflation, with the The impact of lower PGM prices and cost inflation on margins moderated by the restructuring and closure of loss-making operations.
Sibanye-Stillwater was now planning to add 600MW of renewable energy capacity by the end of 2026, with a further 100-200MW planned for the close of the current year.
Of this, 407MW is currently in construction, of which 267MW is scheduled to achieve commercial operation this year.
With a total capital investment of R12-R14bn funded through PPAs, these renewable projects will supplement 30% of Sibanye-Stillwater’s utility supply and offer a 15-30% discount to Eskom tariffs.
By the close of the period under review, Sibanye-Stillwater had borrowings of R39.4bn, cash on hand of R16bn and net debt of R23.4bn.
Its current liquidity headroom of R45.7bn consists of R16bn cash and R29.7bn in undrawn facilities. This year it expects to refinance $675m worth of bonds maturing in November 2026 bonds.
BUSINESS REPORT