CFO Charl Keyter says the mining company took advantage of record-high commodity prices to increase its revenue.
Sibanye-Stillwater has reported record results for the six months ended 31 December 2020, stating a 75 percent increase in revenue to R127 billion and headline earnings increasing to 1.068 cents compared with a headline loss of 40 cents the previous year.
“I believe under extremely challenging conditions associated with Covid-19 we have managed to keep production on an even keel, which has assisted us to take advantage of record-high commodity prices, ultimately leading to significant cash flow generation and a concerted effort to bring our leverage down,” says CFO Charl Keyter. “We were in a net cash position of R3 billion at the end of 2020 as opposed to a net debt position of R21 billion at the end of 2019.”
The average basket price of four of the platinum group metals (PGM) mined by the company rose 83 percent and the average rand gold price increased by 43 percent. The weak local currency and reduced local costs further boosted the company’s earnings.
The mine said its focus would now shift to the appropriate allocation of capital to ensure value for stakeholders and sustainability. “Until we have a sustainable answer to Covid-19, I believe all focus will be on the health and safety of our employees,” Charl says. “Additionally cost pressures will have to be managed to ensure that we operate a sustainable business going forward.”
He adds that the recently announced Eskom increase of 15 percent does not help, as Sibanye-Stillwater is an energy intensive business. “However, we are in the early stages of reducing our reliance on Eskom with alternative energy projects.”
The company said it was positioned for a stronger financial performance for 2021 due to strong commodities and increased production.
