JSE-listed IMPALA PLATINUM releases a production update and trading statement

Implala-platinum-trading-update

Impala Platinum Zimbabwe operations sustained volumes while Marula increased by 12.1%.

Impala Platinum Holdings Limited (Implats) has released a production update and trading statement for the year ended 30 June 2022. Production and earnings are expected to be lower.

The Group said it will release audited financial statements at the beginning of September 2022. “Implats will release its audited results for the year ended 30 June 2022 (“the period” or “FY2022”) on or about 1 September 2022,” read the update.

Production update

The Group faced some production challenges during the period under review. This impacted production, resulting in a 3.6% decline in gross concentrate volumes. Impala Platinum’s gross concentrate volumes declined to 3.17 million 6E ounces, from 3.29 million 6E ounces in the prior comparative period.

The mentioned decline in concentrate volumes includes a 4.3% decrease, to 2.27 million 6E ounces, from managed operations and a 2.1% decrease, to 550 000 6E ounces, from joint ventures.

Moreover, concentrate receipts from third parties also declined by 1.8%, to 351 000 6E ounces for the period under review.

Challenges that affected production include extended safety stoppages and intermittent industrial action. Power supply interruptions at Impala Rustenburg also significantly affected production. Overseas, the ongoing supply chain constraints affected operations in Impala Canada.

Implats’ refined volumes also declined by 5.6%, to 3.09 million 6E ounces. This came on the back of “lower concentrate production and the extended maintenance required on the Number 3 Furnace at Impala Rustenburg,” reads the statement.

Nevertheless, The Group reported that Marula delivered a record performance in the period in review, with a 12.1% increase in production. At the same time, Zimplats sustained production levels despite an increasingly complex operating environment.

The Group reported 3.15 million 6E ounces in sales volumes for the year ended 30 June 2022. Implats undertook some destocking of refined inventory to take advantage of firmer PGM prices in the second half of the financial year in review (H2 FY2022). This was also to offset the impact of the extended furnace maintenance.

However, the revenue per 6E ounce sold is expected to decline by 4.5% to R37 703 per ounce. This reflects the impact of weaker dollar pricing for The Group’s primary products. 

Due to project spending at Zimplats and other Group operations, capital expenditure is expected to increase for the period.

Impala Platinum Trading Update

The Group expects basic earnings to decline by between 29% and 35%, to be between R30.5 billion and R33.5 billion. Implats reported basic earnings of R47.0 billion and earnings per share (“EPS”) of 5 996 cents in the prior comparative period. This was because of “the reversal of impairment losses on property, plant and equipment and the prepayment of royalties of R10.6 billion,” read the statement.

EPS for the period in review are also expected to decline by between 33% and 39%, to be between 3 669 cents and 4 030 cents per share. 

The Headline Earnings Per Share (“HEPS”) for the period are expected to decrease by between 13% and 21%, to be between 3 669 cents and 4 030 cents.

Lower sales volumes and inflationary pressure on operations adversely impacted earnings for the period.