Sibanye pain continues

Low platinum prices continue to hamper Sibanye-Stillwater’s performance, leading to the company posting a significant interim loss.

Sibanye released its results for the six months through June 2024 on Thursday, which revealed a weak performance for the Platinum Group Metals (PGM) miner.

The company reported a 9% decline in revenue to R55.2 billion, which it attributed to lower commodity prices.

Its basic earnings declined from R7.42 billion in H1 2023 to a loss of R7.47 billion – an over 200% decrease. The miner’s adjusted EBITDA fell by 53% to R6.65 billion.

Sibanye avoided a headline loss, reporting headline earnings of R137 million, but this is a 98% decline from the previous year.

However, the company posted a loss of R7.14 billion for the period, a significant swing from the R7.79 billion profit it reported in H1 2023.

Sibanye CEO Neal Froneman said considerable progress was made during the six-month period to secure the sustainability of the miner’s operations through the current low-price environment.

He said the company managed to optimise its operational cashflow to protect the integrity of its balance sheet while retaining optimal leverage to a recovery in the commodity price cycle.

The miner maintained a sound financial position, with undemanding balance sheet leverage of 1.43x net debt to adjusted EBITDA. Froneman said this is “well within our comfort levels”. 

“We have proactively reinforced the group balance sheet through a series of financial transactions since June 2024, which have resulted in additional debt headroom of approximately R25 billion and significantly enhanced balance sheet liquidity and flexibility,” he said.

“The actions we have taken have been decisive and are evidenced by reduced costs and improved profitability at most of our operations during H1 2024 compared with H1 2023.” 

He said the full cost benefits from recent restructuring in its South African region are expected to materialise in coming periods. 

“Further restructuring of the US operations for the lower PGM price environment will be undertaken, with the GalliCam project assessing the potential for repurposing of the Sandouville refinery potentially being repurposed for sustainability,” he said.

“The measures taken have ensured that the group is well positioned, not only to endure through this period of low commodity prices but with improved optionality and leverage to a turn in the commodity price cycle, which will support ongoing value creation and strategic delivery.”