South Africa

Royal Bafokeng Platinum earnings soar despite negative impact of Covid-19

JOHANNESBURG - Mining company Royal Bafokeng Platinum (RBPlat) on Tuesday reported a 573.6 percent increase in basic headline earnings per share to 335.3 cents for the six months ended June, despite this period being hampered by loss of production due to Covid-19.

Mining firms, like other businesses in South Africa, were forced to shut operations when the government implemented a nationwide lockdown from March 27 to try and limit new infections of the coronavirus.

RBPlat said its half year revenue rose by 45.6 percent to R4.606 billion (US$269 million) due to a strong platinum group metals (PGM) basket price, although the growth in its business was restricted by the lockdown, resulting in a decrease in 4E (gold, platinum, palladium and rhodium) and platinum ounce output of 12.9 percent and 12.8 percent respectively.

"The impact of the shutdown due to the national lockdown on production and cost of mining and processing has been severe, with the necessary care and maintenance as well as shutdown and restart costs being incurred in the process," chief executive offcier Steve Phiri said.

"Despite the current uncertainties, we remain confident that our balance sheet remains robust to deliver shareholder value through our growth strategy and ultimately capital returns."

The impact of Covid-19 interruptions resulted in an effective loss of 45 days of production on RBPlat operations, yielding lower year-on-year performance in all key operational metrics.

Total development decreased by 20.6 percent, or 3.9 km to 15 km, when compared to the same period in 2019.

"The ultimate duration of the Covid-19 pandemic is at this stage unpredictable, thus during the second half of the year we will focus on sustaining and consolidating the gains made in our key injury frequency rates in support of creating a zero harm operating environment," the company said.

"We are committed to protecting and growing our financial capital in the short, medium and long term, through responsible investment in capital expenditure to increase profitability and grow the business.

RBPlat said due to limited visibility on how the coronavirus pandemic would affect operations for the remainder of the year, it had revised production guidance for 2020 to between 3.55 Mt and 3.80 Mt.

It said the second half of the year was likely to see the PGM market being less severely impacted by the health crisis than the first half, but the recovery could be slow and uneven.

- African News Agency (ANA)

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