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Higher metal prices saw Impala Platinum revenue surge 36% to R48.6bn, as the restructuring of its Rustenburg operations gained traction, the company said on Thursday as it delivered its annual financial results.
The world’s third-biggest platinum producer lifted headline earnings to R3bn, from a loss of R1.2bn the previous year. Revenue benefited from improved palladium and rhodium prices.
Implats had cut jobs at its Rustenburg shafts in a bid to streamline operations.
“The execution of the Impala Rustenburg restructuring was advanced to plan during the years, with the successful completion of the first phase,” said CEO Nico Muller.
Net cash generated from operations jumped to R10.7bn from an outflow of R1m in the previous year. The company had earlier revealed that it plans to sell some of its shafts, but no decision has been taken on the sale.
Muller said a decision on the sale of assets would be evaluated on an ongoing basis. The company’s net cash position stands at R1.1bn.
Gross profit for the year climbed to R6.8bn, from R1.1bn seen in the previous year.
“Given the uncertain and volatile local and global economic outlook and the ongoing restructuring underway at Impala Rustenburg, the board resolved not to declare a dividend".
The company said its strong performance was anchored by the operational turnaround at its Rustenburg operations, which represent nearly 50% of its mine-to-market production.
Implats said platinum pricing remained under pressure, and jewellery remained a key driver of demand. It further stated that palladium and rhodium had strengthened over the past few years, due to stronger demand in Europe and China, as a result of emission regulations in motor vehicles.
Palladium is primarily used to help reduce emissions in petrol vehicles, while platinum is used primarily to reduce emissions in diesel vehicles.
Implats said its focus in 2020 would be on advancing the phased restructuring of Rustenburg operations. The company is also engaged in the process of wage negotiations with unions, in what was described as a "cordial process".
Failure to reach agreement wage talks often results in strikes, with negative impact on operations.
Its share price was up more than 3% by midday, last trading at R89.31
