S&P Global upgrades Sibanye-Stillwater’s credit rating

Sibanye-Stillwater CFO Charl Keyter: The rating upgrade reflects the significant improvement in the group.

Sibanye-Stillwater announced that S&P Global Ratings had upgraded its credit rating to ‘BB-’ from ‘B+’ with a stable outlook. 

Sibanye-Stillwater CFO Charl Keyter said in a statement that the rating upgrade is positive and reflects the significant improvement in the group’s operating and financial position. He said that despite considerable operational disruptions and other challenges associated with the Covid-19 pandemic earlier this year, the group delivered solid results for third quarter of 2020, with the production build up ahead of forecast, underpinning another record financial result. 

He further added that:

“Production from the South Africa operations is expected to normalise during the fourth quarter of 2020, underpinning a more robust outlook for the group, should precious metals prices sustain at current levels.”

Fitch Ratings assigned a first-time issuer credit rating of ‘BB’ with a stable outlook to Sibanye-Stillwater in August 2020. The Fitch Ratings report published on 2 November notes that “the IDR [issuer default rating] reflects a robust financial profile with forecast funds from operations gross leverage comfortably below 1x in the medium term, and strong demand fundamentals of palladium and rhodium in the next decade”. 

In a recent report, S&P Global Ratings said that materially higher cash flows owing to strong gold and PGM prices have resulted in stronger-than-expected credit metrics and balance sheets.