• Challenging economic and geopolitical environment impacts Sibanye-Stillwater's performance.
  • Safety remains a priority despite some setbacks in the second quarter.
  • Strategic diversification and financial position help mitigate challenges and position for the energy transition.

Sibanye-Stillwater, the parent company of Mimosa Zimbabwe, has released its financial and operating results for the six months ended June 30, 2023. The results reflect the challenging global macro-economic and turbulent geopolitical environment that prevailed during the first half of the year. Slowing global growth and declining commodity prices, excluding gold, have significantly impacted the company's performance.

The operating environment has been equally demanding, with regional factors posing significant challenges. Climate change-induced extreme weather events, such as severe storms, disrupted operations in the United States and Australia. Social discontent, including widespread strikes in France and ongoing community and labor-related disruptions in South Africa, further added to the operational challenges. The shortage of critical skills in the mining industry and electricity disruptions and crime in South Africa have also affected productivity and costs.

Despite these challenges, Sibanye-Stillwater remains committed to its core value of safety. While there was a regression in safety indicators during the second quarter of 2023, the company maintains its focus on achieving Zero Harm in the workplace. Tragic incidents resulting in the loss of six colleagues have emphasized the importance of continuous improvement in health and safety.

The company's strategic evolution, including commodity and geographical diversification since 2016, has helped mitigate the impacts of declining platinum group metals (PGM) prices and operational disruptions. The improved financial contribution from South African gold operations has cushioned the effects of these challenges. Sibanye-Stillwater's investments in future-facing metals and the green economy in Europe, the United States, and Australia are expected to provide increasing financial benefits in the coming years, positioning the company to benefit from the global energy transition.

While regional challenges negatively impacted operations in the first half of 2023, steps are being taken to address and mitigate these issues. Sibanye-Stillwater expects the impacts to be minimized in the second half of the year. The company's adjusted EBITDA for the period was 37% lower than the previous year, primarily due to the decline in PGM prices and regional operational challenges. However, the company's robust financial position, with substantial cash reserves and undrawn debt facilities, provides it with significant headroom to weather further challenges and capitalize on value-accretive opportunities.

Profit for the period was also lower compared to the previous year, reflecting the challenging market conditions. However, the company's South African PGM operations delivered a solid operating result, effectively managing the impact of load curtailment and making progress in addressing cable theft. The recovery in production from South African gold operations following the suspension of operations in 2022 contributed to the positive performance.

The company's US PGM operations faced challenges due to a shaft incident and critical skills shortages, which affected productivity and unit costs. The global autocatalyst recycling industry also experienced a decline in demand, impacting the company's US PGM recycling operation. The Sandouville nickel refinery in France faced plant downtime and supply chain constraints, leading to decreased production.

Looking ahead to the second half of 2023, Sibanye-Stillwater expects a more positive outlook, provided there are no unexpected disruptions. The company remains committed to navigating challenges and maintaining its strategic evolution to safeguard global sustainability through its metals.

- Equity Axis News