ROYAL Bafokeng Platinum’s (RBPlat) first full-year loss yet was the result of the "devastating impact" of double-digit cost inflation and a plunge in metal prices, chief financial officer Martin Prinsloo said on Tuesday.
RBPlat reported a net loss of R3.77bn for the year to end-December, compared with a net profit of R598.8m the year before. RBPlat had posted a R4.5bn impairment against its assets, including the Bafokeng Rasimone Platinum Mine and both phases of its new Styldrift mine, because of the reduction in platinum group metal (PGM) prices and the reduction of the company’s market value, Mr Prinsloo said.
"Looking at our financial results, it’s an indication of the devastating impact on our industry of this combination of double-digit reductions in metal prices and double-digit mining inflation and costs," he said.
"It had a detrimental impact on our business as well," he said, pointing out RBPlat had made a range of cost cuts across its operations and social and labour plans to keep its cost increase to 6.3%, below the industry average of 10%.
"The combination of those two have meant for the first time in our history we’ve made a gross loss of R39m — hopefully for the first and last time," he said, referring to the gross loss of R39.8m for the period compared, to a gross profit of R865m the year before.
Revenue fell 19% to R3bn because of a 13% fall in the rand price for the basket of metals the company produces, with the rand weakness against the dollar offsetting a 28% fall in the dollar platinum price.
CEO Steve Phiri said all increases and bonuses for management were frozen for this year.
"(This year) will remain a very challenging year... so while the amount is small, it addresses the psychological factor that this is not life as usual," he said.
RBPlat had pushed back its new Styldrift mine, slowing work to a bare minimum, but doing enough so that the mine could be ramped up quickly when the metals markets improved, Mr Phiri said.
The mine has been delayed by 12 months and will reach steady state production in the first quarter of 2020.
RBPlat shares fell 2.7% on Tuesday to R36.50, extending its decline over a 12-month period to 37%.
Steve Phiri. Picture: MARTIN RHODES
ROYAL Bafokeng Platinum’s (RBPlat) first full-year loss yet was the result of the "devastating impact" of double-digit cost inflation and a plunge in metal prices, chief financial officer Martin Prinsloo said on Tuesday.
RBPlat reported a net loss of R3.77bn for the year to end-December, compared with a net profit of R598.8m the year before. RBPlat had posted a R4.5bn impairment against its assets, including the Bafokeng Rasimone Platinum Mine and both phases of its new Styldrift mine, because of the reduction in platinum group metal (PGM) prices and the reduction of the company’s market value, Mr Prinsloo said.
"Looking at our financial results, it’s an indication of the devastating impact on our industry of this combination of double-digit reductions in metal prices and double-digit mining inflation and costs," he said.
"It had a detrimental impact on our business as well," he said, pointing out RBPlat had made a range of cost cuts across its operations and social and labour plans to keep its cost increase to 6.3%, below the industry average of 10%.
"The combination of those two have meant for the first time in our history we’ve made a gross loss of R39m — hopefully for the first and last time," he said, referring to the gross loss of R39.8m for the period compared, to a gross profit of R865m the year before.
Revenue fell 19% to R3bn because of a 13% fall in the rand price for the basket of metals the company produces, with the rand weakness against the dollar offsetting a 28% fall in the dollar platinum price.
CEO Steve Phiri said all increases and bonuses for management were frozen for this year.
"(This year) will remain a very challenging year... so while the amount is small, it addresses the psychological factor that this is not life as usual," he said.
RBPlat had pushed back its new Styldrift mine, slowing work to a bare minimum, but doing enough so that the mine could be ramped up quickly when the metals markets improved, Mr Phiri said.
The mine has been delayed by 12 months and will reach steady state production in the first quarter of 2020.
RBPlat shares fell 2.7% on Tuesday to R36.50, extending its decline over a 12-month period to 37%.
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