Johannesburg - Sibanye Gold [JSE:SGL] said it won’t pay an interim dividend for the first time since it began trading in 2013 as the biggest producer of South African gold reported a first-half loss.
The results in the six months through June were affected by a big impairment charge on unprofitable mines it plans to close, provision for a settlement in a lung-disease class-action lawsuit and financing costs following its $2.2bn purchase of US platinum-group metals producer Stillwater Mining.
Sibanye’s net debt following the Stillwater deal rose to $1.69bn at the end of June. The company is emphasising cash preservation and the payment of a dividend is “inappropriate until leverage is reduced,” it said in a statement on Wednesday.
Paying a dividend has been a core part of Sibanye’s strategy since it was spun off from Gold Fields [JSE:GFI].
While its South African mines are high-cost and aging, they are proven cash generators that formed the basis of the company’s regular shareholder payouts until now.
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