Sibanye-Stillwater R7bn loss signals continued market challenges

Sibanye's diversification strategy couldn't shield it from the PGM crisis

"The Group’s financial results for H1 2024 reflect this low prevailing commodity price environment, with Group profitability lower year on year, primarily due to the material decline in PGM prices compared with H1 2023," acknowledged CEO Neal Froneman.

The company's US PGM operations were particularly hard hit, necessitating a non-cash write down of R7.5bn.

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This impairment reflects the company's reassessment of the long-term palladium price outlook, a key factor influencing the expected future cash flows from these operations.

Back home the South African PGM operations experienced a dramatic 60% drop to R4.8bn.

This accounted for the bulk of the 53% EBITDA decline.

Recovery strategy

Despite the losses, Sibanye is backing a more proactive approach to navigating these challenging times.

Froneman highlighted the company's focus on "securing the sustainability of our operations through the current low-price environment and optimising operational cash flow to protect the integrity of our balance sheet."

The company pointed to a series of strategic initiatives aimed at bolstering its financial position.

These include a successful refinancing of its R5.5bn revolving credit facility and the securing of a €500m green loan for its Keliber lithium project in Finland.

Long term prospects

"Our fundamental position regarding the longer-term outlook for the metals we produce and battery metals we will produce remains unchanged," said Froneman, expressing confidence in the company's strategic direction.

The company's Keliber lithium project is a key component of its future growth strategy, aiming to position Sibanye as a leading supplier of lithium hydroxide for the European battery electric vehicle market.