Platinum group metals (PGMs) miner Northam Holdings has reported a 25.5% year-on-year decline in operating profit to R3.6-billion for the year ended June 30, as rising mining cost inflation and flat rand metal prices outweighed solid production and sales growth, including record sales volumes that for the first time exceeded one-million ounces of platinum, palladium, rhodium and gold (4E).

Sales revenue increased by 6.9% to R32.9-billion, compared with R30.8-billion in 2024, largely because of a 5.9% increase in volumes sold.

Northam reported lower earnings for the year despite operational improvements across its portfolio. The company said it, therefore, expected basic earnings per share (EPS) to decrease by between 14.8% and 19.8% to between R3.70 and R3.93, compared with EPS of R4.61 in the prior financial year.

Headline earnings per share (HEPS) are expected to be between 9.4% and 19.4% lower at between R3.59 and R4.03, compared with the HEPS of R4.45 reported for the 2024 financial year.

Total refined metal produced increased by 5.2% to 937 942 oz of 4E, while equivalent refined metal from own operations rose to 899 244 oz of 4E, up 0.7% from the 892 876 oz of 4E in 2024.

Chrome concentrate output rose by 9% to more than 1.4-milllion tonnes, supported by improved throughput, feed grades and concentrator yields.

The company reported net debt of R5.1-billion, with a net debt-to-earnings before interest, taxes, depreciation and amortisation (Ebitda) ratio of 1.04 at year-end, before a one-off cash inflow of $66-million received after year-end from Heraeus Precious Metals following a redetermination of historical refining outcomes.

Northam added that it retained R12.3-billion in undrawn banking facilities.

Northam’s operations generated R4.7-billion in cash before capital expenditure (capex) of R5-billion. Its Ebitda declined to R4.9-billion, from R6.3-billion in 2024.

Meanwhile, metal inventory increased to 495 350 oz of 4E, with a carrying value of R9-billion and an estimated sales value of R16.5-billion.

Unit cash costs for the company rose by 8.1% to R25 728/oz of 4E. At Zondereinde, unit costs rose by 7.8% to R26 758/oz of 4E; Booysendal’s costs rose by 5.6% to R18 502/oz of 4E; and at Eland, unit costs increased by 17.2% to R40 562/oz of 4E.

Safety performance improved over the period, with the total injury incidence rate per 200 000 hours worked recorded at 1.14, compared with 1.23 in 2024. However, Northam reported three fatalities during the year.

Production growth was supported by Zondereinde and Booysendal. Zondereinde benefited from logistical improvements as upper group two stoping shifted to higher-yielding eastern portions of the mine. Booysendal maintained steady-state production while focusing on productivity. Eland’s 4E output improved by 5% despite safety-related restrictions.

The company invested R4.9-billion in capital projects, including Zondereinde’s Western extension, Eland’s ramp-up, fleet purchases and concentrator upgrades at Booysendal South.

Capex for the 2026 financial year was forecast at R5.2-billion, mainly for elective growth programmes. Development milestones at Zondereinde included shaft equipping and ventilation work, while Booysendal continued decline development. Eland’s ventilation reconfiguration and shaft development enabled multi-blast conditions, facilitating faster underground progress.

Renewable-energy projects remained a key focus for the company. Construction of an 80 MW solar power facility at Zondereinde began during the year under review, with commissioning expected midway through 2026.

Additional power purchase agreements were signed for 140 MW from the Karreebosch wind farm and 80 MW from the Thakadu solar farm, both of which are expected to begin supplying power in 2027.

Northam said it expected most of its energy requirements to be met from renewable sources before the end of the decade.

The company said commodity markets remained cyclical, and that the outlook for PGMs was uncertain because of global geopolitical and macroeconomic risks. Eskom load curtailment and water supply interruptions also continued to present operational risks. Northam said it had implemented additional self-generation capacity and water recycling initiatives to mitigate these challenges.

The company added that the low PGM price environment continued to constrain earnings across the sector, as its mining costs were largely fixed. Northam said it remained focused on liquidity management, supported by its domestic medium-term notes programme, undrawn banking facilities of R12.3-billion and flexibility to adjust capex if required.

Northam will publish its results for the financial year to June 30 on August 29.

The company’s share price on the JSE fell by more than 7% on August 19, following the publication of its trading statement.