Royal Bafokeng Platinum back in profit

JOHANNESBURG (miningweekly.com) – The year-on-year sales revenue of black-controlled platinum mining company Royal Bafokeng Platinum (RBPlat) increased by 9.8% to R3.3-billion in the 12 months to December 31, reflecting the higher rand basket price and serving as the main driver of the increase in the gross profit margin to 7.2%, compared with last year’s 1.3% loss.

The company produced 304 000 oz of 4E metals in concentrate and 196 000 oz of platinum in concentrate.

Earnings before interest, taxes, depreciation and amortisation, as a percentage of revenue, increased from 9.8% in 2015 to 14.7% in 2016, which represents a 50% improvement.
                                                                          
The headline earnings of RBPlat, headed by CEO Steve Phiri, grew by 204% to R166.7-million with headline earnings a share of 87c, compared with a headline loss a share of 83c for the previous comparable period.
 
The average cash unit cost a tonne milled at Bafokeng Rasimone Platinum Mine (BRPM)  increased by 10.4%, from R1 066 in 2015 to R1 177 in 2016. The cash unit cost per platinum ounce increased by 7.8% from R14 504 to R15 639, owing mainly to above inflationary increases in labour, contractor and utility costs.

A review of BRPM is planned in order to lower costs.
 
Net cash flow generated by operations reduced marginally from R619.2-million to R 585.3-million in 2016.

Cash and near-cash investments amounted to R835.5-million, compared with R917.6-million at December 31 last year.
 
During 2016, RBPlat funded 74% of its R1.1-billion capital expenditure (capex) from cash generated by operations and Styldrift I on-reef development revenue receipts, well up on the 30% of capex that was funded from cash generated by operations in 2015.
 
Total capex was reduced by 44% year-on-year to R1.126-billion given the scaling down of activities at Styldrift in response to the flat markets. At BRPM replacement capex was 78.5% lower owing to the completion of certain projects and the deferral of others.

Stay-in-business capex of the 7 400-employee business was only marginally down by 1.8% to R110-million – 40% of operating expenditure – which is expected to increase to between 4% and 6% of operating expenditure.