Implats takes R19.8 billion hit

Impala Platinum said its upcoming financial results will include impairments of R19.8 billion and warned it will swing to a full-year loss after platinum-group metals retreated. 

The Johannesburg-based company expects to post a loss for the 12 months through June of 16.9 billion rand to 17.8 billion rand, it said in a statement on Wednesday.

Most of the writedown — more than 80% — relates to the firm’s flagship Rustenburg complex, it said. 

The decrease in earnings is primarily due to the impact of declining prices of PGMs — which are used to curb emissions in gasoline and diesel vehicles — on the company’s revenue, Implats said.

Palladium and rhodium have fallen sharply since the start of last year, plunging 50% and 63% respectively, while platinum has fared better.

The major platinum miners in South Africa — the largest producer of the metal — are slashing costs in response to the weak metal prices. Implats has joined Sibanye Stillwater and Anglo American Platinum in trimming thousands of jobs from their PGM assets in the country.

Implats expects profit before some one-time items — known as headline earnings — to decrease by as much as 90% compared to the previous year, to between R1.9 billion and R2.8 billion, according to the statement.