Implats pain continues

Impala Platinum’s interim earnings are expected to take a nosedive, as job losses and cost-cutting measures were not enough to offset a weak platinum price.

Implats released a trading update for the six months through December 2024, which revealed a significant drop in earnings for the platinum producer.

Implats’ headline earnings for the period decreased, as the miner earned 8% less per ounce of metal sold in rands due to lower metal prices and a stronger exchange rate.

In addition, lower dollar pricing was compounded by the strengthening rand exchange rate, which more than offset the benefit of the miner’s improved refined and saleable output, higher sales volumes and strong cost controls.

Implats’ headline earnings and headline earnings per share are expected to decrease by between 40% and 49%. 

However, basic earnings and basic earnings per share are expected to increase by between 2% and 21%. 

The company explained that its earnings were negatively impacted by impairments of property, plant and equipment at its Impala Canada operations and its Two Rivers joint venture.

Implats said it delivered a commendable operating performance in H1 FY2025 following group-wide labour restructuring and changes to operating parameters at several of its assets.

In April last year, the miner initiated a Section 189 consultation process at its South African operations, which may have resulted in the loss of as many as 3,900 jobs.

However, the miner said its unit costs benefitted from strategic actions and easing input inflation. 

“The group is on track to deliver previously provided refined production, unit cost and capital expenditure guidance in the 2025 financial year,” it said.

The miner said its group unit costs per 6E ounce are expected to increase by 3% to around R20,900 on a stock-adjusted basis.

Implats’ gross group 6E production decreased by 4% to 1.82 million ounces from 1.90 million ounces in the six-month period.

Its production from managed operations declined by 5%, with its Marula, Zimplats and Impala Canada operations proving a drag on the miner’s results.

However, the miner’s production from joint ventures increased by 2%.

In addition, the company said its sales volumes increased by 5% to 1.77 million 6E ounces, including saleable production from Impala Canada and Impala Bafokeng. 

However, the softer US dollar basket pricing was compounded by appreciation in the rand exchange rate. This saw group sales revenue decrease to around R23,800 per 6E ounce sold.

Impala Platinum’s full interim results are expected to be released on 27 February 2025.