Implats swings to first net profit in five years as prices rally

Impala Platinum will report its first net profit since 2014 as the South African miner benefits from higher metals prices and operational improvements.

Implats expects to report basic earnings per share of between R1.81 ($0.12) and R2.30 for the year through June, from a R14.86 loss a year earlier. So-called headline earnings per share are seen at as much as R4.40, from a loss of R1.71 last year.

Key Insights

The return to profit is likely to bolster the case for a resumption of dividend payouts, especially after the company reduced its debt following a bond swap announced last month.

Implats and other South African producers have received a profit boost from a combination of surging prices for palladium and rhodium and a weaker rand. The company also benefitted from increased sales volumes, as its problem-child Rustenburg operation improved and it sold some metal stocks.

The outlook still has its risks though, as South African platinum miners hold talks with unions over a new three-year wage deal. The Association of Mineworkers and Construction Union rejected the company’s initial offer, the labour group said this week.

Market Reaction

Implats shares dropped after the announcement before paring losses to trade 0.1% lower at 10:20 in Johannesburg, compared with a 1.1% drop in the FTSE/JSE Africa Platinum Mining Index.

ZAR/USD
17.37
(+0.22)
ZAR/GBP
22.76
(-0.01)
ZAR/EUR
20.55
(+0.16)
ZAR/AUD
12.45
(+0.01)
ZAR/JPY
0.16
(-0.21)
Gold
1946.00
(-0.49)
Silver
26.86
(-2.09)
Platinum
951.00
(-0.83)
Brent Crude
45.01
(-1.03)
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2158.50
(-0.96)
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Top 40
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Financial 15
10134.54
(-0.90)
Industrial 25
74920.20
(-1.09)
Resource 10
59008.33
(-0.26)
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