IMPALA PLATINUM HOLDINGS LIMITED - Audited preliminary results for the financial year ended 30 June 2021 and cash dividend declaration
02 September 2021 7:05
Audited preliminary results for the financial year ended 30 June 2021 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
ADR code: IMPUY
("Implats" or "the Group")
AUDITED PRELIMINARY RESULTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021 AND CASH DIVIDEND DECLARATION
Key features for FY2021:
- Regrettably, three fatal injuries recorded at managed operations
- 48% improvement in FIFR to 0.026 and a 13% improvement in TIFR to 9.84
- Successfully navigated Covid-related operational challenges
- 16% increase in gross 6E concentrate volumes to 3.29Moz
- 17% increase in 6E sales volumes to 3.27Moz
- Group unit costs per 6E rose 11% to R14 840/oz on a stock-adjusted basis
- Consolidated Group capital expenditure of R6.4bn
- 6E dollar basket pricing up 59% to US$2 587/oz driven by record rhodium and palladium prices
- Rand revenue per 6E ounce sold increased by 59% to R39 478/oz
- 109% increase in EBITDA to R61.4bn and 125% increase in headline earnings to R36.4bn or 4 635c per share
- 166% increase in free cash flow of R38.3bn with closing net cash of R23.5bn
- 70% of free cash flow allocated to shareholder returns through convertible bond repurchases and cash dividends
- Final dividend of 1 200c per share, bringing total FY2021 dividend to 2 200c per share
- Continued tightening in markets for palladium and rhodium to support higher pricing in the medium term
- Platinum prospects remain muted in the near term, but growing momentum for development of hydrogen economy
- Increasing focus on critical role South Africa plays in PGM supply
Commentary
Implats harnessed the benefit of improved operational momentum and record rand pricing for its primary products to
deliver stellar results for the year ended 30 June 2021 (the period). This was achieved despite the challenges presented
by Covid-19 and the erratic provision of essential services required to operate the Group's globally diverse suite of
mining and processing assets.
Safe production is non-negotiable. Ensuring the safety of employees and contract workers is essential to delivering on
Implats' commitment to zero harm. Implats recorded an improved safety performance with a 13% and 48% improvement in the
total injury frequency and fatal injury frequency rates, respectively. Despite this, regrettably, three employee
fatalities were recorded at managed operations in the period.
6E concentrate production from mine-to-market operations, including the JVs at Two Rivers and Mimosa, increased by 16%
to 2.93 million ounces, as production from managed operations (Impala Rustenburg, Zimplats, Marula and Impala Canada)
improved 18% to 2.37 million ounces. In the prior comparable period, total 6E production losses of 248 000 ounces in
concentrate were directly attributed to the impact of Covid-19 on mine-to-market operations. Third-party 6E concentrate
receipts increased by 9% to 358 000 ounces. In aggregate, total 6E concentrate production of 3.29 million ounces increased
by 16%.
Gross refined output of 3.27 million 6E ounces increased by 16% (including saleable production from Impala Canada)
with excess identified stock of 80 000 6E ounces expected to be released by the end of FY2022.
Inflationary pressures were compounded by additional expenditure due to Covid-19, once-off safety bonuses, development
to improve mining flexibility and targeted spend on asset integrity at Impala Rustenburg. On a stock-adjusted basis,
unit costs increased by 11% to R14 840 per 6E ounce, with Covid-related expenditure amounting to R563 million or R240 per
6E ounce.
Implats achieved record financial results, driven by higher sales volumes delivered into a robust rand PGM pricing
environment. The increased profitability and strong free cash flow generation enabled further proactive debt reduction
while providing strong shareholder returns in line with the Group's capital allocation framework.
Revenue of R129.6 billion increased by 86%, gross profit increased by 130% to R53.5 billion and EBITDA of R61.4bn was
achieved at an EBITDA margin of 47%.
A R1.5 billion IFRS 2 BEE charge was included in other expenses, arising on the refinancing of the BEE partners in Marula
and the establishment of an employee share ownership trust. This charge has no tax impact and is included in both EBITDA
and headline earnings.
Sustained improvements in both operational performance and prevailing and expected PGM pricing, resulted in the Group
partially reversing prior impairments of R14.7 billion. This resulted in the inclusion of an after-tax benefit of
R10.6 billion in profit for the year of R47.9 billion.
The Group generated R38.3 billion in free cash flow, after capital investment of R6.3 billion at its managed operations,
and ended the period with net cash after debt of R23.5 billion and liquidity headroom of R30.9 billion. The board of
directors declared a final dividend of 1 200 cents per share, bringing the total dividend for the year to 2 200 cents
per share.
In calendar 2021, a moderation in investment demand is likely to result in the platinum market returning to surplus.
The supply impact of the release of in-process inventory by South African producers will be compounded by the demand
impact of the global semi-conductor chip shortage on automotive production. In the case of palladium, reduced Russian
supply should result in a persistent but moderated deficit, while in rhodium a more balanced market in 2021 is expected
before demand growth in 2022 results in continued market tightness and a fundamental deficit.
Prospects and outlook
Internal planning to secure operational resilience during the pandemic has been ongoing since its emergence in early
2020 and vigilance in protecting the safety and health of employees will be maintained in FY2022 as the Group completes
its planned vaccination programme for employees.
The operational focus in the near term will be on the continued optimisation of Impala Canada, leveraging enhanced
mining flexibility established at Impala Rustenburg to deliver further growth, and advancing projects across mine-to-market
operations where Implats seeks to capitalise on inherent mining efficiencies and flexibilities at its low-cost assets
to capture quick-to-market production growth to harness the benefit of a robust PGM pricing cycle.
The Group's processing assets are a key competitive differentiator. The changing ore mix of its growing production profile
and the aspiration to improve the energy efficiency and environmental impact of its value chain will result in a series of
studies aimed at proposing the optimal route for expansion.
Implats' balance sheet is strong, with a substantial closing net cash balance and increased funding flexibility through
upsized and refinanced facilities. In line with Implats' capital allocation priorities, this will allow the Group to
increase shareholder returns and fund the sustainable and efficient growth potential of its asset base.
Key financial metrics
Year ended Year ended
30 June 2021 30 June 2020
Revenue Rm 129 575 69 851
Gross profit Rm 53 455 23 271
EBITDA* Rm 61 442 29 386
Profit for the year Rm 47 855 16 484
Headline earnings Rm 36 359 16 126
Free cash flow* Rm 38 304 14 395
Basic earnings Rm 47 032 16 055
Net cash (excluding leases) Rm 23 473 5 748
Basic earnings per share cents 5 996 2 066
Headline earning per share cents 4 635 2 075
Dividends declared
Interim cps 1 000 125
Final cps 1 200 400
Total cps 2 200 525
*Non-International Financial Reporting Standards metrics
Operating statistics
Year ended Year ended
30 June 2021 30 June 2020
Gross refined production
6E (000oz) 3 270.6 2 812.7
Platinum (000oz) 1 516.6 1 349.3
Palladium (000oz) 1 121.4 892.0
Rhodium (000oz) 193.4 180.6
Nickel (tonnes) 15 443 15 387
Sales volumes
6E (000oz) 3 274.4 2 792.9
Platinum (000oz) 1 396.5 1 371.0
Palladium (000oz) 1 092.8 871.7
Rhodium (000oz) 200.2 174.0
Nickel (tonnes) 13 111 10 973
Prices achieved
Platinum (US$/oz) 1 043 885
Palladium (US$/oz) 2 419 1 896
Rhodium (US$/oz) 17 610 6 870
Nickel (US$/t) 15 621 14 109
Consolidated statistics
Average rate achieved (R/US$) 15.26 15.31
Closing rate for the period (R/US$) 14.32 17.38
Revenue per 6E ounce sold (R/oz) 39 478 24 863
(US$/oz) 2 587 1 624
Tonnes milled ex-mine* (000t) 23 210 19 576
Gross 6E concentrate receipts (000oz) 3 292 2 849
Capital expenditure* (Rm) 6 437 4 488
Group unit cost per 6E ounce stock adjusted* (R/oz) 14 840 13 345
(US$/oz) 964 851
*Managed operations
Declaration of dividend
Shareholders are advised that the board has resolved to declare a final gross cash dividend of 1 200 cents per ordinary
share amounting to R9.8 billion at the date of declaration for the financial year ended 30 June 2021. In terms of the
approved dividend policy, a minimum dividend of 30% of free cash flow pre-growth capital should be declared. The board
has discretion to vary this percentage depending on the current and forecast financial performance, as well as market
and other factors, including sufficiently capitalising the business to allow the Group to take advantage of future
value-accretive growth opportunities. As a result of improved profitability and strong cash flow generation on the back
of strong metal pricing and sustained operational performance, the board has increased the dividend to approximately 50%
of adjusted free cash flow in line with its commitment to prioritise returns to shareholders. The dividend has been
declared from retained earnings.
Implats has 817 268 148 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 960 cents per ordinary share for shareholders
liable to pay the dividend withholding tax and 1 200 cents 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, 2 September 2021
Last day for trading to be eligible for cash dividend Monday, 20 September 2021
Trading ex-dividend commences Tuesday, 21 September 2021
Record date Thursday, 23 September 2021
Dividend payment date Monday, 27 September 2021
Share certificates may not be dematerialised or rematerialised between Tuesday, 21 September 2021 and Thursday,
23 September 2021, 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 considering the full
announcement. Deloitte & Touche, the auditors, have issued an unmodified audit opinion, which included key audit matters
on the consolidated financial statements. The audit opinion, which contains key audit matters, together with the annual
consolidated financial statements, are available on Implats' website at www.implats.co.za.
This announcement is not audited but is extracted from the audited results.
The financial information on which the above-mentioned prospects and outlook is based has not been audited and
reported on by Implats' external auditors.
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/2021/jse/isse/IMPE/ye2021.pdf.
The full announcement is also 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.
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
2 September 2021
Johannesburg
Sponsor to Implats
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 02-09-2021 07:05:00
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