ROYAL Bafokeng Platinum (RBPlat) plunged into a heavy loss for its 2015 financial year, with a hefty R4.5bn impairment weighing heavily on results that reflected the dismal nature of the global platinum market.
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 recorded a R4.5bn impairment against its assets, including the Bafokeng Rasimone Platinum Mine (BRPM) 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.
Revenue fell 19% to R3bn because of a 13% fall in the rand price for the basket of metals the company produces, with the weak rand against the dollar offsetting a 28% fall in the dollar platinum price.
Platinum group metal production and sales fell 5% during the year because of lower grades and safety stoppages during the year.
Given the nature of the platinum group metals market, RBPlat said it had radically slowed work at the first phase of its Styldrift mine, and had increased focus at BRPM on the higher-grade Merensky Reef and was mining less UG2 reef at the mine.
“Styldrift 1 remains our core platform for organic growth. However, it is not deemed appropriate to ramp up our platinum ounces from the high-quality Merensky Reef into a currently depressed market and it is also not prudent to burden our balance sheet by raising debt under the prevailing market conditions,” it said.
“In order to better align the timing of the ramp-up of Styldrift 1 to the prevailing market conditions, the start of ramp-up has currently been delayed by 12 months, which will result in steady-state production of 230,000 tonnes per month being achieved in the first quarter of 2020.”
RBPlat reported a headline loss of 83c per share compared with earnings of 239c the year before. It had cash of R918m on its books at the end of the year.
RBPlat forecast it would end this year with a positive cash balance and would be unlikely to draw down on a R500m revolving credit facility it put in place in January this year.