IMPALA PLATINUM HOLDINGS LIMITED - IMP,IMCB22 : Interim results for the six months ended 31 December 2019
27 February 2020 7:05
IMP,IMCB22 : Interim results for the six months ended 31 December 2019: https://senspdf.jse.co.za/documents/2020/jse/isse/impe/ie2019.pdf
Interim results for the six months ended 31 December 2019
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
JSE Share code: IMP
ISIN: ZAE000083648
JSE Convertible Bond Stock Code: IMCB22
JSE Convertible Bond ISIN: ZAE000247458
ADR code: IMPUY
("Implats" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Key features for the six months
- Board declares interim dividend of R1,25 per ordinary share - linked to free cash flow
- Headline earnings of R3,4bn or 436 cents per share
- Free cash flow of R5,0bn
- Net debt of R1,9bn after funding North American Palladium acquisition cost of R10,9bn
- 6% and 9% improvements in TIFR and LTIFR
- PGM 6E dollar basket price up 36% to $1 420/6E ounce
- Rand revenue per 6E ounce sold increased by 41% to R20 888/6E
- Further tightening in markets for palladium and rhodium expected to support higher pricing in the short
to medium term
- Strong longer-term underpin to industrial demand for platinum from hydrogen and fuel cell technology
adoption
- Operational and cost guidance for FY2020 remains unchanged, premised on the expected release of excess
inventory in the second half of the financial year
Commentary
Implats delivered solid results for its half year ended 31 December 2019. Sustained operating performances
from mining operations, together with robust rand PGM pricing during the period, offset short-term challenges
associated with concentrator maintenance and constrained smelter availability, resulting in improved free
cash flow and strong headline earnings.
This enabled the funding of the acquisition of Impala Canada through a combination of cash, a forward sale
of metal and debt. The Group was also able to reinstate dividends, based on a pay-out ratio of free cash flow
generated before growth capital of 30%. The Board declared an interim dividend of R1,25 per ordinary share,
which will be paid on 23 March 2020.
Safety remains the Group's foremost priority. Despite 6% and 9% improvements in the total and lost-time
injury frequency rates, respectively, Implats mourns the loss of three employees at its managed operations.
The Group's strategic re-positioning as a high-value, profitable and competitive PGM producer was
meaningfully advanced through initiatives to improve organisational effectiveness at key operations. In addition,
a three-year wage settlement was secured with the Association of Mineworkers and Construction Union at Impala
Rustenburg and Marula.
At Impala Rustenburg, the sustained improvement in cost performance, productivity and safety at 12 and
14 Shafts has resulted in these operations collectively meeting the internal targets set to avoid disposal or
closure and we now expect to operate these assets for the foreseeable future. While higher pricing has provided
some medium-term life extension at 1 Shaft, 9 Shaft is likely to be closed in the short-term due to depleted
mineable reserves.
The Group delivered stable 6E in concentrate production of 1,53 million ounces, with Group refined
6E production down by 17% on constrained smelter availability due to a planned furnace rebuild at Zimplats.
Free cash inflow of R5,0 billion improved year-on-year as received rand PGM pricing rose by 41% per ounce,
offsetting a 16% decline in 6E sales volumes due to an increase in work-in-process metal inventories.
Revenue improved by 19% to R28,0 billion, gross profit increased by more than 90% to R6,2 billion and
headline earnings rose by 52% to R3,4 billion or 436 cents per share.
Net cash generated from operating activities amounted to R6,0 billion for the six months. The incentivised
early conversion of the US$ bond resulted in a R3,1 billion reduction in debt as 64,3 million Implats shares
were issued in August 2019. The benefit of this, together with the payment of residual debt at Zimplats, was
partially offset by a bridging loan used to fund the acquisition of Impala Canada, and the Group ended the half
year in a net debt position of R1,9 billion.
Key financial metrics
December 2019 December 2018
Revenue 28 019 23 521
Gross profit 6 166 3 232
Profit for the period 3 467 2 458
Headline earnings 3 378 2 228
Dividends (cps) 125 -
Capital expenditure (Rm) 1 925 1 706
Net (debt)/cash (excluding leases) (1 943) (976)
Net asset value (Rm) 49 079 42 614
Share performance
Earnings per share (cents) 439 321
Headline earning per share (cents) 436 310
Operating statistics
Six months Six months
to 31 Dec to 31 Dec
2019 2018
Gross refined production
6Es (000oz) 1 316,7 1 589,1
Platinum 657,7 799,8
Palladium 391,1 464,1
Rhodium 85,2 106,2
Nickel (tonnes) 8 126 8 074
Sales volumes
6Es (000oz) 1 327,9 1 572,6
Platinum 675,2 773,4
Palladium 396,6 485,5
Rhodium 91,5 104,2
Nickel (tonnes) 5 198 5 949
Prices achieved
Platinum ($/oz) 888 829
Palladium 1 647 1 035
Rhodium 4 491 2 395
Nickel ($/t) 14 772 13 399
Consolidated statistics
Average rate achieved (R/$) 14,71 14,18
Closing rate for the period (R/$) 13,98 14,38
Revenue per 6E ounce sold (R/oz) 20 888 14 804
($/oz) 1 420 1 044
Tonnes milled ex-mine (000t) 10 305 10 235
Capital expenditure (Rm) 1 925 1 706
Group unit cost per 6E ounce stock adjusted (R/oz) 13 157 11 413
($/oz) 896 805
DECLARATION OF INTERIM DIVIDEND
The Board of Implats wishes to inform shareholders that it has approved the declaration of an interim cash
dividend of R1,25 per ordinary share for the six-month period ended 31 December 2019. The interim dividend has
been declared in terms of the newly approved dividend policy, which is aligned to the Company's capital
allocation framework. The dividend policy states that a dividend will be declared from 30% of free cash flow
generated, pre-growth capital, for any given period, subject to the Board's discretion.
The Company has 799 034 147 ordinary shares in issue and the Company's tax reference number is 9700178719.
The dividend has been declared from retained earnings and will be subject to a 20% dividend withholding tax
for shareholders who are not exempt from, or do not qualify for, a reduced rate of withholding tax. Therefore,
the net dividend amount is R1,00 per ordinary share for shareholders liable to pay the dividend withholding tax
and R1,25 per ordinary share for shareholders exempt from dividend withholding tax. Shareholders are advised
to complete the requisite declaration form to make the Company aware of their tax status. The salient dates
are as follows:
Declaration date Thursday, 27 February 2020
Last day for trading to be eligible for cash dividend Tuesday, 17 March 2020
Trading ex-dividend commences Wednesday, 18 March 2020
Record date Friday, 20 March 2020
Dividend payment date Monday, 23 March 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 18 March 2020 and Friday,
20 March 2020, both days inclusive.
Short form announcement
This announcement is a summarised version of the Group's full announcement and, as such, it does not contain
full or complete details pertaining to the Group's results. Investment decisions should be made after taking
into consideration the full announcement. This announcement in itself is not reviewed but extracted from
reviewed results.
Implats' results were released on the JSE Stock Exchange News Service (SENS) on 27 February 2020 and are
available on the Group's website www.implats.co.za and
https://senspdf.jse.co.za/documents/2020/jse/isse/impe/ie2019.pdf. They are available for inspection,
at no charge, at our registered office (2 Fricker Road, Illovo) and the office of our sponsor (Nedbank
Corporate and Investment Banking, 135 Rivonia Road, Sandton) from 09:00 to 16:00 weekdays. A copy of the
full announcement may be requested from the company secretary.
This short-form announcement is the responsibility of the Board of directors.
Transfer secretaries
South Africa: Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Ave,
Rosebank, Johannesburg, 2196, (PO Box 61051, Marshalltown, 2107)
United Kingdom: Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol, BS13 8AE
Sponsor: Nedbank Corporate and Investment Banking
Directors: MSV Gantsho (Chairman), NJ Muller (Chief Executive Officer), M Kerber (Chief Financial Officer),
PW Davey*, D Earp, BT Koshane, AS Macfarlane*, FS Mufamadi, B Ngonyama, MEK Nkeli, LN Samuel, PE Speckmann,
ZB Swanepoel
(*British)
Queries:
Johan Theron
E-mail: johan.theron@implats.co.za
T: +27 (0) 11 731 9013/43
M: +27 (0) 82 809 0166
Emma Townshend
E-mail : emma.townshend@implats.co.za
T : +27 (0) 21 794 8345
M : +27 (0) 82 415 3770
Alice Lourens
E-mail: alice.lourens@implats.co.za
T: +27 (0) 11 731 9033/43
M: +27 (0) 82 498 3608
27 February 2020
Johannesburg
Sponsor to Implats
Nedbank Corporate and Investment Banking
Date: 27-02-2020 07:05:00
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