The board and management of Impala Platinum (Implats) express their sincere condolences to the families, friends and colleagues of the deceased.
“Human behaviour continues to contribute to many safety incidents and our emphasis is on ensuring effective leadership, responsible behaviour, and driving a culture of personal accountability and interdependence,” says Implats CEO, Nico Muller.
There has been some progress across the group in terms of its safety performance.
The LTIFR improved by 8.8% to 5.92 per million man‐hours worked (including contractors) compared to 6.49 per million man‐hours last year.
During the year, Zimplats completed a consecutive 365 days without a single lost‐time injury and several other operations also reached significant safety achievements.
Implats’ total platinum output rose 6.4% to 1.530 million platinum oz in 2017, from 1.438 million platinum ounces last year.
This included a 2.2% increase in mine‐to‐market output, and a 35% increase in third‐party production.
However, low platinum group metals basket prices, combined with higher than inflation wage and electricity cost increases, as well as a deterioration in productivity levels at certain operations, eroded profitability.
Implats headline earnings were lower by R1.07 billion to a loss of R983 million.
Implats’ headline earnings per share decreased from 12 cents per share to a loss of 137 cents per share.
Excluded from the headline loss is an impairment charge of R10.2 billion related to the 2007 prepayment of the estimated, contractual, Royal Bafokeng royalty.
Revenue was assisted by a marginally improved rand basket and rose to R36.8 billion from R35.9 billion.
There has been good progress in some areas with excellent operational performances from many Implats operations.
Overall, production from Implats’ operations increased year on year, but this benefit was more than offset by planned higher levels of refined stock at year end.
Increases in group unit costs, year on year, were contained at 4.4% and cost of sales increased by 4.%.
“Implats’ focus during the 2017 financial year has remained firmly on the continued implementation of our strategic response plan to succeed in a low‐price environment,” says Muller.
“Our view is that the current metal price environment could conceivably stay lower for even longer, and should be viewed as ‘the new normal’. Notwithstanding our continued confidence in long‐term market fundamentals, our short‐ to medium‐term focus will be heavily biased toward cash preservation.”
The response plan encapsulates overall cost optimisation, reprioritising and rescheduling capital expenditure, productivity improvements at Impala Rustenburg, strengthening the group’s balance sheet and retaining Implats’ social licence to operate.
Implats further strengthened its balance sheet over the past year through the conclusion of the R6.5 billion new convertible bond issue. Cash generated from operations reduced to R1 billion, and at year end, the group had gross cash of R7.8 billion on hand and R4 billion in un-utilised bank debt facilities, which remain available until 2021.
“Our focus is on restoring operational excellence, particularly at Impala Rustenburg and Marula, and we are concluding a strategic review of our current assets. The potential of a restructuring is not excluded,” states Muller.
Feature image credit: Implats