Implats rallies on record dividend, higher guidance


Implats rallies on record dividend, higher guidance


Published Date: 2021-03-01 | Source: Stephen Gunnion | Author: Stephen Gunnion

Implats rallies on record dividend, higher guidance

The company has grown production and benefitted from rising prices for platinum group metals.

Impala Platinum is paying a R10 interim dividend after a record first-half in which it grew production into a higher price environment for platinum group metals (PGMs). It's shares rallied more than 7% after it raised its guidance for the remainder of the year.

The group, which has operations in SA, Zimbabwe and Canada, reported a 9% increase in concentrate production of 6E PGMs to 1.68-million ounces for the six months to end-December, supported by the including of its Canadian operations. It bought North American Palladium, now Impala Canada, in December 2019 to diversify its asset base beyond Southern Africa. 6E PGMs include platinum, palladium, rhodium, iridium, ruthenium and gold.

Refined 6E production for the period increased by 29% to 1.69-million ounces. The rise was primarily due to constrained processing capacity in the comparative period when planned smelter maintenance resulted in a stock build-up. It also benefitted from the inclusion of saleable production from Impala Canada.

Implats cashed in on a big increase in PGM prices over the period and said continued tightness in palladium and rhodium markets and an improving demand outlook for platinum was expected to support firm pricing.

Revenue more than doubled to R58.1 billion over the six months to end-December while gross profit increased to R22.4 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) of R25.1 billion rose three-fold and headline earnings increased by 328% to R14.4 billion. Headline earnings per share rose 325% to R18.55.

The group generated R20.1 billion of free cash flow after capital investment of R2.7 billion and ended the period with gross cash of R24.8 billion, net cash of R20.3 billion and liquidity headroom of R28.5 billion. It declared an interim dividend of R10 per share, up from R1.25 in the prior comparative period.

Implats raised its full-year production guidance to between 3.2-million and 3.46-million ounces of 6E PGMs from 2.8-million to 3.4-million ounces previously.


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