Multinational mining and metals processing group Sibanye-Stillwater has reported pleasing results for the six months ended June 30, with all group operations other than the South African gold operations remaining on track to deliver safe production and unit costs within guidance ranges for the full-year, as well as improved profitability.

The company noted a R3.7-billion reduction in its basic loss to R3.6-billion with headline earnings of R5.4-billion, 19-fold higher than the first half of 2024.

Sibanye-Stillwater reported that the difference between headline earnings and the basic loss was primarily owing to impairments of R9.7-billon.

During a results presentation on August 28, outgoing CEO Neal Froneman said the group’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) was R15.1-billion, inclusive of Section 45X (S45X) credits, which is 127% higher than for the first half of 2024.

Excluding S45X credits, group adjusted Ebitda was R10-billion, 51% higher than the same period last year.

Sibanye-Stillwater noted that greater operational stability and good cost control at most group operations, combined with leveraged exposure of the South African gold operations to the rand gold price, has notably improved group profitability the period.

The company said the positive financial outcomes from solid operational management and decisive restructuring, were amplified by the incorporation of S45X credits in terms of the US Inflation Reduction Act (IRA), following agreements reached with third-party refiners of its platinum group metals (PGMs).

A total S45X credit of R5.1-billion – comprising combined estimated credits for 2023, 2024 and the first half of this year – has been recognised in cost of sales for the US PGM mining and recycling operations for the period, benefiting cost and boosting profitability for the period, with associated cash payments expected in 2026.

“Improved operational profitability and cash flow, together with effective balance sheet management and reinforcement measures implemented during 2024, has enhanced the group financial position, and [we are] satisfied that the group is well positioned to thrive under multiple scenarios and to create ongoing shared value for stakeholders,” the company said.

Sibanye-Stillwater noted that only the South African gold operations fell short of planned production and cost levels but continued to benefit from leverage to the increasing gold price during the six months under review, delivering a significantly improved financial contribution.

Adjusted Ebitda from the South African PGM operations of R4.8-billion for the first half of this year was in line with the first half of 2024, despite 151 863 oz of platinum, palladium, rhodium and gold (4E), 16% lower year-on-year.

A 7% higher average basket price received for the first half of this year offset lower metal sales.

Sibanye-Stillwater added that the inventory built-up during the first half of this year is expected to be processed and sold in the second half of the year.

Compared with the second half of 2024, adjusted Ebitda for the first half of this year was 81% higher, primarily driven by a 10% increase in the average 4E basket price.

Meanwhile, the company noted that the restructuring of the US PGM operations during the fourth quarter of 2024 was successfully implemented, with production and costs for the first half of this year ahead of planned restructuring levels and, on an annualised basis, better than the full-year guidance.

The profitability of the US PGM operations also improved despite lower metal sales, owing to a build-up of inventory during the smelter transition in the second quarter of this year and an average platinum and palladium (2E) PGM basket price for the first half of this year, that was less than 1% higher than for the first half of 2024.

On a like-for-like basis, adjusted Ebitda – excluding S45X credits –  for the first half of this year improved by $8-million, or R273-million, to a loss of $9-million, or R51-million, compared with an adjusted Ebitda loss of $16-million, R324-million, for the first half of 2024 – excluding the once off $43-million, or R812-million – insurance payment during the first quarter of 2024, related to the mid-2022 flooding event.

The average 2E PGM basket price for the third quarter of this year to date is $1 229/oz. This is 25% higher than the average for the first half of this year of $985/oz and 9% below all-in-sustaining-cost (AISC) – excluding S45X credits – of $1 351/oz.

Similarly to the South African PGM operations, if higher PGM prices persist, Sibanye-Stillwater said the profitability of the US PGM operations should increase substantially.

During the second quarter of this year, agreement was reached with the contract refiner with both parties signing certification statements reflecting this agreement.

Consequently, total S45X credits of $159-million, or R2.8-billion, for the PGM underground operations, were recognised during the second quarter of this year, comprising a credit against cost of $20-million, or R360-million, for the first half of this year and full year credits of $70-million, or R1.2-billion, and $69-million, or R1.2-billion, for 2023 and 2024 respectively, significantly benefiting cost and profitability for the US PGM operations for the period.

The company explained that adjusted Ebitda for the US PGM operations including just the first half of this year S45X credit of $20-million, or R360-million, would have increased to $11-million, or R309-million.

Combined with the full S45X credits for 2023 and 2024, adjusted Ebitda for the US PGM operations increased substantially to $151-million, or R2.8-billion, for the first half of this year, 457% higher than for the first half of 2024.