JOHANNESBURG (miningweekly.com) – Precious metals mining company Sibanye-Stillwater on Thursday delivered another record financial performance for the six months ended June 30.

The JSE- and New York-listed company headed by Neal Froneman reported significantly higher production year-on-year from the South African platinum group metal (PGM) and gold operations, which it described as reflecting a sustained recovery in production from the Covid-19 disruptions experienced in 2020. Production from the US PGM operations were flat year-on-year.

The improved operational performance together with considerably higher commodity prices, resulted in half-year group profit increasing by 160% to R25.3-billion compared with R9.7-billion for the corresponding period of last year. This surpassed half-year 2020’s group record of R20.8-billion by 21%. Normalised earnings of R24.4-billion were 176% higher than for half-year 2020.

In line with the dividend policy, an interim dividend of R8.5-billion, equivalent to an annualised dividend yield of 10%, was approved by the board.

Owing to the solid production outlook and robust strong commodity price, this interim dividend is equivalent to 35% of normalised earnings and is at the upper end of the range specified in the group's dividend policy.

Disciplined implementation of the capital allocation framework supported continued delivery on strategic imperatives during the half-year, the company said in a release to Mining Weekly.

These included investment in high-return brownfield projects to sustain the South African PGM and gold operations, with development of these projects beginning last month.

Gross debt was reduced by 44% from R28.1-billion to R15.9-billion, with early redemption of the 2022 corporate bond further reducing borrowings by R5-billion.

In addition, the share buyback programme announced in June provides a tangible value uplift for shareholders, which the company described as being consistent with its stated intention of returning surplus capital to shareholders. The R9.6-billion share buyback of 5% of the shares in issue, should, once completed, further enhance shareholder returns through higher dividend pay-outs to remaining shareholders, as well as improving net asset value per share, the company added.

Together with the interim dividend declared, this could result in an annualised total return to shareholders of 15% for 2021.