Impala Platinum earnings soar, offsets help ease Zimbabwe cash lock-up

Impala Platinum (JSE: IMP) said on Thursday its annual profit increased more than 31-fold, driven by higher platinum group metal (PGM) prices, prompting it to sharply increase its dividend.

The miner said its headline earnings per share – a profit measure widely used in South Africa – were 25.48 rand ($1.59) in the year ended June 30, compared with 0.82 rand a year earlier.

Impala said its rand revenue per ounce increased by 51% on the back of higher metal prices, resulting in a 58% jump in revenue to 135.1 billion rand.

Its refined production was 5% higher at 3.56 million ounces, aided by the release of previously accumulated inventory in its processing pipeline. Metal sales were 4% up at 3.51 million ounces.

Impala said it will pay a final dividend of 4.90 rand per share and make an additional payout of 9.55 per share. The company paid a dividend of 1.65 rand per share last year.

Cash unlocked, greenfields in focus
The company said it had made progress in resolving the lock-up of its cash in Zimbabwe, where the government owes platinum miners millions of dollars in unpaid export proceeds.

Zimbabwe, where Impala’s subsidiary Zimplats (ASX: ZIM) operates, requires all exporters to convert 30% of their proceeds into local currency via government channels, but the government is frequently behind in paying out the local currency to exporters.

Impala CFO Meroonisha Kerber told analysts during a results call that the “situation had improved significantly since March”.

“We reached an agreement to allow us basically to get 50% of our surrender proceeds in cash, and the other 50% will be utilised for set-offs,” Kerber said.

“Since that agreement’s been put in place, they have honoured the terms of that and we have been able to offset between taxes, royalties, and customs duties about $99 million and we’ve had access to $150 million of local currency,” she added.

The miner, which reversed the 11.1 billion rand impairment of its Rustenburg assets due to an improved PGM price outlook, said it was studying the potential of some of its greenfield assets, including Zimplats Portal 10 and Styldrift 2, to help sustain future production.

($1 = 16.0390 rand)

(Reporting by Nelson Banya; Editing by Muralikumar Anantharaman and Susan Fenton)