IMPALA PLATINUM HOLDINGS LIMITED - Reviewed preliminary results for the financial year ended 30 June 2020 and cash dividend declaration
03 September 2020 7:06
Reviewed preliminary results for the financial year ended 30 June 2020 and cash dividend declaration
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)
Reviewed preliminary results for the financial
year ended 30 June 2020 and cash dividend
declaration
Key features for FY2020
* 14% and 11% improvements in LTIFR and TIFR,
respectively
* 6E dollar basket price up 46% to US$1 624/oz
* Rand revenue per 6E ounce sold increased by 57% to
R24 863/oz
* Record headline earnings of R16.1bn or R20.75/share
* Free cash flow of R14.4bn
* Net cash of R5.7bn after funding R9.4bn North American
Palladium acquisition cost
* Board declares final dividend of R4.00/share (R5.25/share
full year dividend)
* Continued tightness in palladium and rhodium markets
expected to support firm pricing in the short to medium
term
* Near-term platinum prospects remain muted, improving on
switching, heavy duty diesel and robust industrial demand
Commentary
Safety remains the Group's foremost priority. In a
period marked by unexpected public health and associated
operational challenges, Implats recorded 14% and 11%
improvements in the lost-time and total injury frequency
rates, respectively. Despite these gains, Implats mourns
the loss of five employees at managed operations and two
employees at joint ventures during FY2020.
The strategic repositioning of Implats over the past
several years enabled the Group to successfully navigate
the challenges created by the external shock of the
Covid-19 pandemic. Operational resilience enabled
sustained delivery of refined metal to customers and
the Group benefitted from robust pricing for primary
products and achieved record financial results.
The coronavirus pandemic significantly disrupted and
impacted business performance during the second half
of the financial year and resulted in an opportunity
cost of mine-to-market concentrate production of 290 000
6E ounces. The release of previously identified excess
inventory mitigated the impact on reported production and
refined 6E production declined by 8% to 2.8 million ounces.
Reported unit costs were impacted by lower volumes,
additional investment in development and changes in ore
mix, which impacted yield. These compounded the impact of
inflationary pressures and a weaker rand, increasing
stock-adjusted unit costs by 12% to R13 345 per 6E ounce.
This excludes abnormal production costs of R1.3 billion.
If these were included, stock adjusted unit costs would
have increased by 18% to R14 067 per 6E ounce.
Pricing for the Group's primary products was robust and,
together with rand depreciation, drove substantial
improvements in the Groups' financial performance. Revenue
improved by 44% to R69.9 billion, gross profit increased to
R23.3 billion and headline earnings increased to R16.1 billion
- or R20.75 per share.
The Group generated R14.4 billion of free cash flow after
capital investment of R4.2 billion and ended FY2020 with
gross cash of R13.3 billion, net cash of R5.7 billion and
liquidity headroom of R16.1 billion, notwithstanding the
acquisition of Impala Canada, the payment of the R973 million
interim dividend and expenditure incurred to induce the early
conversion of the US$250 million bond.
Gains in safety and efficiency at Impala Rustenburg resulted
in upward revisions to the planned production profile at the
operating complex, negating the need for large-scale
retrenchments. In Zimbabwe, operations continued to excel
despite increasing socioeconomic pressures. The operational
turnaround and renewed social stability at Marula sustained,
yielding substantial financial value and, at Two Rivers, a
project to increase processing capacity was approved and
advanced during the year. The competitiveness of the Groups'
portfolio was enhanced by the acquisition of Impala Canada,
a mechanised, high-margin primary palladium producer which
further diversified Implats' operating footprint.
Strengthened relationships with key stakeholders were
affirmed by a multi-year wage agreement concluded without
third-party intervention. A strong environmental performance
underpinned the continued commitment to responsible
corporate stewardship.
Meaningful advances were made to strengthen the Group
balance sheet through the reduction of debt and dividend
payments were reinstated. The capital allocation framework
adopted during the year will serve to guide the effective
future allocation of financial resources.
Production rates at most operations normalised back to
near full capacity by year end and the risk of material
disruptions as a result of the pandemic are now steadily
receding.
FY2021 production volumes will be supported through the
planned release of accumulated inventory. Group refined
production is estimated at between 2.8 and 3.4 million 6E
ounces. Implats expects Group stock-adjusted operating costs
of between R14 500 and R15 500 per 6E ounce and capital
expenditure of between R6.0 and R6.8 billion. This guidance
is based on an assumed R/US$ and C$/US$ exchange rate of
R16.63/US$ and C$1.35/US$, respectively and does not account
for further potential Covid-related public health disruptions.
The financial information on which this outlook is based has
not been reviewed and reported on by Implats' external
auditors.
Key financial metrics
Year Year
ended ended
30 June 30 June
2020 2019
Revenue Rm 69 851 48 629
Gross profit Rm 23 271 6 838
Profit for the year Rm 16 484 1 179
Headline earnings Rm 16 126 3 038
Dividends declared cps 525 -
Capital expenditure Rm 4 488 3 786
Net cash (excluding leases) Rm 5 748 1 075
Share performance
Earnings per share cents 2 066 205
Headline earning per share cents 2 075 423
Operating statistics
Year Year
ended ended
30 June 30 June
2020 2019
Gross refined production
6E (000oz) 2 812.7 3 073.5
Platinum (000oz) 1 349.3 1 526.2
Palladium (000oz) 892.0 909.6
Rhodium (000oz) 180.6 205.9
Nickel (tonnes) 15 387 16 049
Sales volumes
6E (000oz) 2 792.9 3 049.1
Platinum (000oz) 1 371.0 1 515.2
Palladium (000oz) 871.7 928.8
Rhodium (000oz) 174.0 205.5
Nickel (tonnes) 10 973 12 954
Prices achieved
Platinum (US$/oz) 885 827
Palladium (US$/oz) 1 896 1 185
Rhodium (US$/oz) 6 870 2 568
Nickel (US$/t) 14 109 12 649
Consolidated statistics
Average rate achieved (R/$) 15.31 14.20
Closing rate for the period (R/$) 17.38 14.09
Revenue per 6E ounce sold (R/oz) 24 863 15 790
($/oz) 1 624 1 112
Tonnes milled ex-mine (000t) 19 576 19 469
Capital expenditure (Rm) 4 488 3 786
Group unit cost per 6E ounce
stock adjusted (R/oz) 13 345 11 886
($/oz) 851 838
Declaration of dividend
Shareholders are advised that the board has resolved to
declare a final gross cash dividend of R4.00 per ordinary
share for the financial year ended 30 June 2020. The final
dividend has been declared in terms of the dividend policy
previously communicated to shareholders. The dividend policy
states that a dividend will be declared from 30% of free cash
flow, pre-growth capital, for any given period, subject to the
board's discretion. The final cash dividend is in addition to
the interim cash dividend of R1.25 declared in February 2020,
bringing the total dividend for the financial year to R5.25
per ordinary share.
Implats has 799 034 147 ordinary shares in issue and the
Company's tax reference number is 9700178719. The cash dividend
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 R3.20 per ordinary share for shareholders liable to
pay the dividend withholding tax and R4.00 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, 3 September 2020
Last day for trading to be
eligible for cash dividend: Monday, 21 September 2020
Trading ex-dividend commences: Tuesday, 22 September 2020
Record date: Friday, 25 September 2020
Dividend payment date: Monday, 28 September 2020
Share certificates may not be dematerialised or rematerialised
between Tuesday, 22 September 2020 and Friday, 25 September
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. Deloitte & Touche, the auditors, have issued an
unmodified review conclusion relating to the reviewed results.
This announcement is not reviewed, but is extracted from the
reviewed results.
The full announcement is available on Implats' website at
www.implats.co.za and on the JSE's website at
https://senspdf.jse.co.za/documents/2020/jse/isse/IMPE/ye2020.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 also be requested from the company secretary
at investor@implats.co.za.
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, NDB Orleyn, 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
3 September 2020
Johannesburg
Sponsor to Implats
Nedbank Corporate and Investment Banking
Date: 03-09-2020 07:06:00
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