28/07/2021

RBPlat announces dividend payment and PGM creation lift of up to 25% as market place booms

Steve Phiri, CEO, Royal Bafokeng Platinum

ROYAL Bafokeng Platinum (RBPlat) reported it would fork out a maiden dividend for its 2020 economical yr of 575 cents per share – about 50% of absolutely free money circulation prior to expansionary capital – and forecast an increase in creation of platinum group metals (PGMs) by as considerably as one quarter this calendar year.

The dividend announcement comes amid a yr of buoyant pricing for PGMs. Total, RBPlat’s common rand basket selling price of 4 PGM metals was two-thirds increased year-on-12 months at some R47,891.70 per platinum ounce. Revenue for rhodium and palladium accounted for 62.5% of the overall even though they account for 35% of creation.

In addition to greater pricing, output was 4.5% larger at 419,000 ounces despite the 45-day disruption posed by the Covid-19 pandemic. Presented the ability of the sector to stem the unfold of the virus in mines and communities, RBPlat’s PGM creation in the recent fiscal 12 months is forecast to be concerning 475,000 to 525,000 oz, representing an raise calendar year-on-12 months of 25% assuming the higher conclude of the estimate.

The advancement in pricing and expected maximize in output – as the organization recovered from Covid-19 lockdown – coincides with the completion of the firm’s R11bn Styldrift undertaking which is anticipated to absorb R400m this 12 months as ancillary operates are finalised.

All in all, overall cash expenditure for 2021 is estimated to be R2.2bn as opposed to R1.8bn in 2020 which includes the finalisation of the smelter up grade of its Maseve facility, because of to be done in the first quarter some three months late owing to previous year’s lockdown.

As guided previously, share earnings arrived in at 1,369 cents in comparison to 26.3 c in the earlier financial calendar year. Headline share earnings were being 1,354.4 cents per share compared to 50.4 cents/share beforehand representing a a lot of-fold yr-on-year enhancement.

The group ended the calendar year on December 31 with internet hard cash of R2.24bn in contrast to R814.2m at end-December 2019. Absolutely free dollars flow just before advancement capital totalled R3bn.

Commenting on sector developments this 12 months, RBPlat anticipated demand for platinum in vehicle autocatalysts to strengthen, even though the metal would continue to be in “industrial surplus which will call for a different 12 months of expenditure demand”. Its discount to gold and palladium, as perfectly as demand from customers for gasoline autocatalysts would make the steel “attractive”, nevertheless.

“The palladium and rhodium markets are both forecast to keep on being in deficit in 2021, despite the fact that narrower than in 2020 owing to more unrefined stocks to be processed in the next 50 % of 2021,” the enterprise said.

DIVIDEND

The dividend was in excessive of RBPlat’s freshly adopted payout plan which is to pay annually 10% of totally free funds circulation before growth money. Steve Phiri, CEO of RBPlat, claimed the company had been sober in choosing how to reward shareholders.

Asked how the corporation will play future dividend payments, Hanré Rossouw, RBPlat CFO, reported for the duration of a presentation today that inspite of the “absolute minimum” of the said plan, the prospect of an interim ‘special’ dividend’ “comes into enjoy in the next half”.

The location rand-denominated selling price of the firm’s PGM basket was R60,000 for every Pt oz which is 25% earlier mentioned the regular basket value in the 2020 money yr.

Commenting on potential shareholder returns, Rossouw included that thought would also be given to a R1.2bn convertible bond which matures in March, 2022. At a strike value of R40,79/share, the bond was “well in the money” – RBPlat is buying and selling at R104/share – so it could be acquired back again to steer clear of the dilution of some 29 million shares remaining issued.

It could also be permitted to transform in buy to further more improve liquidity after prolonged-expression holders of the inventory experienced not long ago offered into a climbing share cost, stated Rossouw. Shares in RBPlat are about 165% higher on a 12-month foundation.