Gross profit of cash-gushing Implats soars 240%

The group, headed by CEO Nico Muller, declared a final dividend of R4 a share, bringing the total dividend for the full year to R5.25 a share.

Revenue was 44% higher at R69.9-billion on higher dollar metal prices and a weaker rand, partially offset by lower PGM sales volumes.

Rand revenue per six element (6E) ounce sold rose by 57% to R24 863/6Eoz and dollar revenue per 6E ounce sold was 46% higher at $1 624/6Eoz.

The group recorded earnings before interest, taxes, depreciation and amortisation (Ebitda) of R29.4-billion at an Ebitda margin of 42% compared with 21.6% in the prior financial year.

Capital expenditure (capex) increased to R4.5-billion, up from the R3.9-billion for the 2019 financial year, on Impala Canada, the impact of the weaker rand on spend at Zimplats and higher expenditure at Marula as the tailings storage facility project was advanced.

Free cash flow nearly doubled to R14.4-billion, with net cash of R5.7-billion after funding the R9.4-billion North American Palladium acquisition cost.

Borrowings (excluding lease liabilities) increased marginally to R7.6-billion from R7.2-billion. At year end the group had an undrawn revolving credit facility of R4-billion and liquidity headroom increased to R16.1-billion.

Tonnes milled from managed operations (Impala, Zimplats, Marula and Impala Canada) increased by 1% to 19.6-million tonnes, with the Covid-19 operating losses suffered at Impala and Marula offset by strong delivery at Zimplats and the maiden contribution from Impala Canada.

The unit cost per tonne milled at managed operations increased by 6% to R1 166 per tonne and concentrate production from mine-to-market operations, including the joint ventures at Two Rivers and Mimosa, declined by 5% to 2.5 million 6E ounces.

Third-party 6E concentrate receipts declined by 9% to 327 000 oz, and in aggregate total 6E concentrate production of 2.8-million ounces declined by 5%.

Group refined production of 2.8-million 6E ounces matched concentrate production for the year, reducing by 8% from 3.1-million ounces in the prior year when refined ounces exceeded concentrate production.

Inflationary cost pressures from labour and utilities were compounded by the impact of the weaker rand on the cost base of Zimplats and the maiden inclusion of the operating costs of Impala Canada.

Total operating costs were reduced by the lower volumes mined. On a stock-adjusted basis, after excluding the R1.3-billion in abnormal production costs incurred during lockdown-enforced care and maintenance, unit cost increased by 12% to R13 345/6Eoz. The unit cost per 6E refined ounce increased at a similar rate to R12 839/oz.

Group smelting and refining operations produced consistently under lockdown with all previously identified excess work-in-process material treated in May. Scheduled acid plant maintenance was brought forward to better match available processing capacity with the expected ramp-up in concentrate production from group operations. This resulted in an accumulation of concentrate stocks of 100 000 6E ounces at year end, which will be treated in the next half of the calendar year.

The improved safety performance is reflected in a 14% improvement in the lost-time injury frequency rate to 4.54 and an 11% improvement in the all injury frequency rate to 11.30 per million person-hours worked.

Nine of the group’s 17 operations achieved millionaire or multi-millionaire status in terms of fatality free shifts. This progress was supported by sustained expenditure in implementing group-wide safety initiatives, technical solutions and training.

There were five employee fatalities at managed operations and both Two Rivers and Mimosa non-managed joint venture operations each suffered a fatal incident during the year.

Covid required extensive revisions to operating practices, while additional care was required to ensure the safe startup of operations that were placed on care and maintenance owing to lockdown regulations or Covid-related operational disruptions, Implats stated