Sibanye-Stillwater’s South African gold operations saw a significant boost in profits, driven by a surge in gold prices. The company reported an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of R1.35 billion for the third quarter, nearly tripling year-over-year, as global gold demand reached record highs. Gold prices in the quarter were up by 24% from the previous year, helping Sibanye offset challenges like lower production.
Production was down by 9% due to a shaft closure at the Kloof mine, which impacted output. Additionally, lower production and a drop in sales pushed the company’s all-in sustaining costs up by 9%. However, the rising gold price helped increase earnings, with strong financial performance expected in the fourth quarter as well.
CEO Neal Froneman pointed to the company’s financial resilience, noting that its major South African operations, Driefontein and Beatrix, are expected to generate strong cash flow as production increases and costs fall.
Meanwhile, Sibanye’s platinum group metals (PGM) business in South Africa grew by 5%, meeting annual targets. Although the company’s US PGM operations reported a loss of R108 million, they’re expected to benefit from recent changes in the US Inflation Reduction Act, which could lead to a R2.6 billion benefit in 2023 and 2024.
Overall, Sibanye’s adjusted EBITDA reached R3.3 billion for the quarter, with additional gains from its Australian zinc operations. The share price rose by over 10% this week, showing positive investor reaction to these results.