Impala Platinum (Implats) experienced a significant drop in profit for the year ending in June 2023, with a nearly 50% decline attributed to lower metal prices, reduced sales, and rising production costs due to inflation.
- The combination of decreased revenue and higher cost of sales resulted in a 46% decrease in gross profit, amounting to R22 billion.
- Implats declared a final dividend of R1.65 per share, bringing the total dividend payout for the year to R5.85 per share, which is approximately 170% lower than the previous year’s payout.
- Domestic and regional challenges, including power supply disruptions in South Africa and Zimbabwe, compounded the effects of softening metal prices and currency depreciation, according to CEO Nico Muller.
- Dollar revenue per ounce of platinum group metals (PGMs) produced by Implats decreased by 18%, primarily driven by lower rhodium and palladium prices, which dropped by 29% and 20% respectively compared to the previous year.
- The decline in dollar prices was partially offset by a 13% weaker rand exchange rate, resulting in a 4% decrease in revenue per 6E ounce in rand terms.
- Unit costs for PGMs rose by 14%, and a decrease in production and sales volumes led to a 32% decrease in earnings before interest, taxation, depreciation, and amortization (EBITDA), and a 43% drop in headline earnings per share (HEPS), reaching R36 billion and R2.21 per share, respectively.
Implats faced significant headwinds due to lower metal prices, inflationary pressures, and operational challenges. While the decline in pricing posed challenges, the company remains focused on optimizing costs, enhancing performance, and capitalizing on the long-term prospects of its primary products. The successful completion of the RBPlat acquisition represents a key milestone for Implats, and the company is dedicated to realizing synergies and maximizing value from this strategic acquisition.