Workflow
Sibanye Stillwater (SBSW) - 2024 Q2 - Quarterly Report
SBSWSibanye Stillwater (SBSW)2024-09-12 13:37
Transcript
Slide

Financial Performance - Revenue declined by 9% to R 55.2 billion (US2.9billion)duetolowercommodityprices[1]−ThecompanyreportedalossofR7.1billion(US2.9 billion) due to lower commodity prices[1] - The company reported a loss of R 7.1 billion (US0.4 billion), which includes non-cash impairments of R 7.5 billion (US0.4billion)[1]−TheGroupreportedalossofR7.1billion(US0.4 billion)[1] - The Group reported a loss of R7.1 billion (US379 million) for H1 2024, compared to a profit of R7.8 billion (US427million)inH12023,includingaR7.6billion(US427 million) in H1 2023, including a R7.6 billion (US407 million) impairment of US PGM operations[11] - Group adjusted EBITDA decreased by 53% to R6.6 billion (US355million),withtheSAPGMoperationsaccountingfor94355 million), with the SA PGM operations accounting for 94% of this decline[11] - The Group's credit rating was maintained at BB- by S&P, alleviating concerns about potential dilutive equity capital raises[8] - The Group's actions have resulted in reduced costs and improved profitability across most operations during H1 2024 compared to the previous year[5] - The Group's financial performance reflects challenges in production and market pricing dynamics[26] - The company reported a net loss of 1,781 million for the six months ended June 30, 2024, compared to a loss of 1,000millioninthepreviousperiod,indicatingadeteriorationinfinancialperformance[90]DebtandFinancing−ThenetdebttoadjustedEBITDAratiostandsat1.43x,wellbelowcovenantlimits,indicatingastrongfinancialposition[1]−AdditionaldebtheadroomofapproximatelyR25billionwasachievedthroughproactivefinancialtransactionssinceJune2024[5]−TheleveragecovenantlimitforallGroupfacilitieswasincreasedto3.5xfortheperiodfromJune30,2024,toJune30,2025,providingsignificantfinancialheadroom[7]−TheGroup′snetdebtincreasedbyR6.8billion(US1,000 million in the previous period, indicating a deterioration in financial performance[90] Debt and Financing - The net debt to adjusted EBITDA ratio stands at 1.43x, well below covenant limits, indicating a strong financial position[1] - Additional debt headroom of approximately R25 billion was achieved through proactive financial transactions since June 2024[5] - The leverage covenant limit for all Group facilities was increased to 3.5x for the period from June 30, 2024, to June 30, 2025, providing significant financial headroom[7] - The Group's net debt increased by R6.8 billion (US367 million), with a net debt to adjusted EBITDA ratio of 1.43x, providing significant financial headroom[11] - The Group secured R1.8 billion (US100million)innon−debtfinancingthroughagoldprepaymentarrangementfor1,497kilogramsofgold,withapotentialupsideexposureof28100 million) in non-debt financing through a gold prepayment arrangement for 1,497 kilograms of gold, with a potential upside exposure of 28% to higher gold prices[8] - Additional non-debt financing of approximately US600 million to US700millionisbeingpursued,potentiallyincreasingtotalproformafinancingtoR36.2billion(US700 million is being pursued, potentially increasing total proforma financing to R36.2 billion (US2.0 billion) to R38.1 billion (US2.1billion)[8]OperationalPerformance−TheSouthAfricanPGMoperationsdeliveredsolidoperationalperformanceandpositivefreecashflow[1]−AdjustedEBITDAfortheAmericasregionwasUS2.1 billion)[8] Operational Performance - The South African PGM operations delivered solid operational performance and positive free cash flow[1] - Adjusted EBITDA for the Americas region was US53 million, showing a significant improvement from a loss of US18million[3]−All−insustainingcostforSouthAfricanPGMoperationswasUS18 million[3] - All-in sustaining cost for South African PGM operations was US1,737 per 2Eoz, reflecting cost management efforts[3] - The Century zinc operation produced 42ktZn with AISC of US2,228/tZn,andisexpectedtoachieveannualguidancedespitedisruptionsinQ12024[10]−TheGroup′sstrategicfocusremainsonoperationalsustainabilityandprotectingthebalancesheetduringthecurrentlow−pricecycle,positioningforfuturerecoveryinmetalprices[6]−TheGroupplansfurtherrestructuringofUSoperationstoadapttothelowerPGMpriceenvironment,withtheGalliCamprojectassessingthepotentialrepurposingoftheSandouvillerefinery[5]−TheGroupachievedaSeriousInjuryFrequencyRate(SIFR)of2.12forH12024,a242,228/tZn, and is expected to achieve annual guidance despite disruptions in Q1 2024[10] - The Group's strategic focus remains on operational sustainability and protecting the balance sheet during the current low-price cycle, positioning for future recovery in metal prices[6] - The Group plans further restructuring of US operations to adapt to the lower PGM price environment, with the GalliCam project assessing the potential repurposing of the Sandouville refinery[5] - The Group achieved a Serious Injury Frequency Rate (SIFR) of 2.12 for H1 2024, a 24% improvement from 2.79 in H1 2023[13] Production and Sales - Gold production from SA operations was 10,703 kg (344,109 oz) for H1 2024, 17% lower than H1 2023, with AISC of R1,251k/kg (US2,078/oz), 18% higher[9] - SA PGM operations produced 828,460 4Eoz, with adjusted EBITDA declining by 60% to R4.8 billion (US255million)duetoa28255 million) due to a 28% drop in the average 4E PGM basket price[8] - US PGM operations achieved a 16% increase in 2E mined production for H1 2024 compared to H1 2023, with AISC declining by 23% year-on-year to US1,343/2Eoz[11] - The average 2E PGM basket price declined by 30% to US977/2Eoz(R18,289/2Eoz),leadingtoa49 977/2Eoz (R18,289/2Eoz), leading to a 49% decrease in adjusted EBITDA to US 27 million (R488 million) compared to H1 2023[16] - The Century zinc tailings retreatment operation was acquired on February 22, 2023, and has been included in the Group's results since the effective date of acquisition[6] Capital Expenditure - Capital expenditure for the US PGM operations is estimated to be between US175millionandUS175 million and US190 million (R3.1 billion and R3.3 billion) for 2024[12] - The capital expenditure for the Keliber lithium project has been revised lower to €300 million (R5.7 billion) for 2024[12] - Total capital expenditure for the six months ended June 2024 was R4,439 million, compared to R997 million in December 2023 and R2,458 million in June 2023[47] - Project capital for H1 2024 increased significantly to R2.3 billion (US125million)primarilyfortheconstructionofsolarpowerfacilitiesandregionaltailingsstorage[17]MarketConditions−AveragebasketpriceforUSPGMundergroundoperationsdecreasedtoUS125 million) primarily for the construction of solar power facilities and regional tailings storage[17] Market Conditions - Average basket price for US PGM underground operations decreased to US1,390 per 2Eoz[3] - The average PGM basket prices received during H1 2024 were lower, impacting overall adjusted EBITDA[26] - The forecast for 2E mined production from US PGM operations in 2024 is between 440,000 2Eoz and 460,000 2Eoz, with AISC projected between US1,365/2EozandUS1,365/2Eoz and US1,425/2Eoz[12] - The Group is exploring monetization of SA uranium assets, comprising 32.2 million lbs (U3O8) in the Cooke TSF and 26.9 million lbs (U3O8) in shallow underground resources[9] Strategic Initiatives - The Keliber lithium project is fully funded through €500 million green financing[1] - Benefits from the restructuring of South African gold operations and central services are anticipated from H2 2024[1] - The company is actively pursuing market expansion and new product development to enhance its competitive position in the mining sector[51] - Future outlook remains positive, with management indicating a commitment to sustainable growth and shareholder value enhancement[52] Safety and Environmental Performance - The Group's safety performance improved, achieving a Serious Injury Frequency Rate (SIFR) at its lowest recorded level, with a 43% reduction in the Fatal Injury Frequency Rate (FIFR) to 0.04[5] - The Total Recordable Injury Frequency Rate (TRIFR) decreased from 5.46 in H1 2023 to 4.42 in H1 2024, representing a 19% reduction[13] - The Group reported three fatalities in H1 2024, down from six in H1 2023, with a fatal injury frequency rate (FIFR) improving from 0.07 to 0.04[13]