The Implats Group has posted record headline earnings on the back of solid operational performances and record sales revenues – despite the considerable impact of COVID-19 – for its full year to 30 June 2020.
The Group also declared a final dividend of R4.00 a share, bringing the total dividend for the full year to R5.25 per share.
The Implats strategic journey over the past few years has set the Group on a firm footing for long-term sustainability and value creation for all stakeholders.
Read more about platinum
Gains in productivity, safety and efficiency at Impala Rustenburg resulted in upward revisions to the planned production profile at the operating complex, negating the need for large-scale retrenchments.
In Zimbabwe, operations continued to excel despite increasing socioeconomic pressures. The operational turnaround and renewed social stability at Marula were sustained, yielding substantial financial value and, at Two Rivers, a project to increase processing capacity was approved and advanced during the year.
Strengthened relationships with key stakeholders were affirmed by a multi-year wage agreement concluded without third-party intervention and a strong environmental performance underpinned the continued commitment to responsible corporate stewardship.
Implats’ portfolio was enhanced by the acquisition of Impala Canada, a mechanised, high-margin primary palladium producer, which further diversified the Group’s operating footprint.
Implats CEO, Nico Muller, says: “The progress made in the strategic repositioning of Implats over the past several years enabled the Group to successfully navigate the challenges created by the unprecedented external shock of the COVID-19 pandemic.
“Operational resilience enabled sustained delivery of refined metal to customers and the Group benefited from robust pricing for primary products, achieving stellar financial results. The Group made meaningful advances in strengthening its balance sheet and dividend payments were reinstated.
“This performance would not have been possible without the unwavering support received from our employees and various key external stakeholders throughout the year.
“This support was particularly vital on the advent of the COVID-19 pandemic, which necessitated unprecedented collaboration and cooperation to ensure that Implats was able to contribute meaningfully to mitigating the devastating effect of the pandemic and deliver sustained value to all our stakeholders.”
- A substantial increase in received rand PGM basket prices offset the operational impact of COVID-19 and drove a strong improvement in financial performance in FY2020
- The pandemic introduced significant uncertainty to the operating environment and is a marked feature of the financial results in the period under review
- This will likely persist in FY2021
- Revenue was 44% higher at R69.9 billion on higher dollar metal prices and a weaker rand, partially offset by lower PGM sales volumes
- Dollar revenue per 6E ounce sold was 46% higher US$1 624 (FY2019: US$1 112)
The average achieved exchange rate was 8% weaker at R15.31/US$ (FY2019: R14.20/US$)
Rand revenue per 6E ounce sold rose by 57% to R24 863 (FY2019: R15 790)
Higher revenue resulted in the Group generating a gross profit of R23.3 billion for the year, a 240% increase (FY2019: R6.8 billion)
The Group recorded EBITDA of R29.4 billion at an EBITDA margin of 42% (FY2019: R10.5 billion and 21.6%).
Headline earnings of R16.1 billion and 2 075 cents per share were achieved, with positive contributions from all Group companies.
The Implats board approved the declaration of a final dividend of R4.00 per ordinary share, in line with the approved dividend policy, bringing the total dividend for FY2020 to R5.25 per ordinary share.
Capital expenditure increased to R4.5 billion (FY2019: R3.9 billion), due primarily to inclusion of spend on Impala Canada, the impact of the weaker rand on spend at Zimplats and higher expenditure at Marula as the tailings storage facility project was advanced
Free cash flow increased to R14.4 billion (FY2019: R7.7 billion)
• Borrowings (excluding lease liabilities) increased to R7.6 billion (FY2019: R7.2 billion)
At year end, the Group had an undrawn revolving credit facility of R4 billion
Liquidity headroom increased to R16.1 billion (FY2019: R12.2 billion)