Implats pays big dividend, but takes a cautious tone on metal price outlook

The Implats mine outside Rustenburg.

  • Implats shareholders benefited from the strong increase in the prices of platinum and palladium, with profit up 130% compared to last year.
  • The company pays a final dividend of R12 per share, bringing the total dividend to R22.
  • But Implats took a cautious tone on the outlook for metals prices.

Rising metal prices and rising sales saw Impala Platinum’s gross profit skyrocket 130% to R 53.5 billion in fiscal 2021, with the company declaring a final dividend of 12 Rand per share, bringing the total dividend for the year to Rand 22.

The price of platinum hit a six-year high of $ 1,267 (~ Rand 18,200) an ounce in February, before investor demand cooled.

Implats – which produces platinum, palladium and rhodium in Zimbabwe, South Africa and Canada – said tons crushed from its operations rose 19% to 23.21 million. This is in part due to the inclusion of Impala Canada’s first full year of production, which was acquired in December 2019.

Implats has managed to ramp up production amid severe constraints on Eskom’s electricity supply, which has resulted in “unprecedented levels of load shedding and call for reductions”.

In South Africa, increasing the self-generation threshold by the government from 1 MW to 100 MW is seen as an opportunity by the company, and its Zimplats business in Zimbabwe was also exploring a large-scale solar power project for ensure the security of the supply.

The group generated R38.3 billion in free cash flow – after a capital investment of R6.3 billion in its managed operations – and ended the period with net cash after indebtedness of R23.5 billion. rand.

Managing Director Nico Muller said the company’s balance sheet is strong and the strong generation of free cash flow allows further debt reduction, so Implats is debt free.

The company has been cautious in its price outlook for platinum group minerals, particularly platinum – which could be affected by the arrival of South African supplies and more subdued demand from automakers then. that they are struggling with a shortage of semiconductor chips.

“Over the 2021 timeline, a moderation in investment demand should lead the platinum market to return to surplus. The impact on supply of the current release of stocks by South African producers will be compounded by the impact on demand from the global semiconductor market. shortage of chips on automotive production, ”said Implats.

In the case of palladium, the reduction in Russian supply is expected to translate into a “persistent but moderate deficit”, while a more balanced market is expected for rhodium this year, before demand growth in 2022 kicks in. results in a deficit.

At noon on Thursday, the Implats share price was down nearly 6%. Its share price is up 45% from a year ago.

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