Impala Platinum (Implats) yesterday drew a line in the sand on its potential takeover deal with Royal Bafokeng Platinum (RBPlat), saying the deal must go through by the end of the month, and that it had little appetite for extensions.
Implats made the announcement as it released its results for the financial year ended June 30 2022, and said profit dropped by 30.8 percent to R33.13 billion, due to lower metal prices and several operational issues.
This as the platinum group metals (PGM) acquired a further 797 405 shares in RBPlat yesterday, which will ramp up its stake to 39.13 percent in the miner.
Implats is involved in a takeover battle for RBPlats with Northam as its rival. Northam has a 34.5 percent stake in RBPlat, with options to increase its holding to about 38 percent.
The government-owned Public Investment Corporation (PIC) has just more than a 9 percent stake in RBPlat.
Implats chief executive Nico Muller during the company’s results presentation yesterday, said the company would close its takeover bid for RBPlat at the end of the month.
“What I will say is that our closing date is the end of September, and we have very little appetite for continued extensions beyond that. We must have closure on a fairly urgent basis,” he said.
According to Muller, the PIC would have about two weeks to decide on Implats’s offer once it announced its intention to close its offer.
Headline earnings of R32bn decreased by 12 percent. Revenue declined by 9 percent and totalled R118.3bn due to softer metal prices.
Sales flow dipped by 4 percent because of lower production volumes and extended furnace maintenance.
Implats reported a 4 percent decrease in the number of tonnes milled from its operations to 22.36 million, with lower reported volumes at Impala Rustenburg and Impala Canada offsetting improved performance at Marula and Zimplats.
Implats also declared a dividend of R10.50 per share, taking the total dividend for its 2022 financial year to R15.75 per share and 48 percent of free cash flow. The group said this was higher than the 30 percent set down in its dividend policy.
“Despite lower received rand PGM pricing and sales volumes, Implats delivered strong earnings and free cash flow in the year ended June 30 2022. This was achieved while navigating numerous operational challenges, including rising input costs, constrained supply chains, and labour market tightness, the impacts of which were compounded by extended safety stoppages, intermittent power supply, and periods of community unrest,” Implats said.
The group generated R28.8bn in free cash flow, after a capital investment of R9.1bn at its managed operations, and ended the period with net cash (after debt) of R26.5bn.
Muller said: “In a period typified by increasing global macro-economic headwinds, escalating geopolitical conflict, and several localised challenges, Implats continued to reap the benefit of elevated metal pricing, albeit off the record-levels achieved in the prior comparable period.”
Looking ahead, Implats said macro-economic uncertainty, inflationary pressures, and geopolitical challenges were likely to persist in the 2023 financial year.
Anchor Capital investment analyst Seleho Tsatsi said: "Implats’ results, like the results of the other PGM miners, showed the impact of both falling PGM prices and rising mining cost inflation.
“Diluted Heps was down 17 percent. That was driven by declines in the platinum, palladium and rhodium of 3 percent, 9 percent and 6 percent, respectively. It’s important to note that prices today are lower than their 2022 financial year averages, so there is likely to be pressure on earnings for the December 2022 results too,” he said.
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