Implats expects higher interim earnings despite load shedding

SHARES in Impala Platinum (Implats) inched up 1.49% on the JSE on Friday after the company reported that earnings for the interim period to end December would be higher, despite taking a knock from Eskom load shedding and elevated inflation for its operations in Zimbabwe and Canada.

Implats closed Friday’s trade session at R208 per share as investors warmed up to the company’s firmer financial performance for the period under review and ignored the severe impact of load shedding on operations.

Half-year earnings before interest, tax, depreciation and amortisation will amount to R24.5 billion, largely unchanged from the 2021 same contrasting period. The 2021 comparative period’s full year constituted a strong financial out-turn for which Implats is paying a discretionary employee bonus.

“Basic and headline earnings, and basic and headline earnings per share for the (December 2022 half year) period are expected to be within the 20% variance range prescribed by the JSE Listings Requirements,” Implats said in a trading update on Friday.

Implats finished the period with 140 000 6E ounces of excess inventory and R27bn in cash balances. Nonetheless, during the interim period under review, Implats suffered from escalating load shedding by Eskom. This impacted its South African processing operations, with production of PGM concentrates for the period remaining unchanged at 1.62 million ounces.

Mining output from own operations was, however, 2% higher at 1.18 million ounces. Volumes from joint venture operations stood at 271 000 ounces. Third party volumes sagged by 10% to 169 000 ounces.

Intensifying load shedding slowed Implats’s refined production by 9% to 1.48 million ounces. Subsequently, the impact of Eskom load shedding on Implats’ concentrate and refined production was 9 000 and 38 000 ounces, respectively.

Further headwinds emanated from depreciation in the rand, which worsened the impact of high energy and consumables pricing for Implats’ Zimbabwean and Canadian operations.