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Sibanye-Stillwater confirms first-half loss

The five-month long strike at its gold operations weighs on profits.

Precious metals producer Sibanye-Stillwater confirmed on Thursday that it swung into the red in the first half as a five-month strike at its South African gold operations weighed on profits.

Sibanye reported a headline loss for the six months to June 30 of 54 cents per share compared with a profit of 4 cents per share in the year ago period, in line with what the firm had already flagged to the market on Tuesday.

“Over the last 18 months the Group has been confronted with a series of unprecedented challenges. We have successfully navigated our way through this challenging period and I am confident that we have emerged in a stronger position,” CEO Neal Froneman said in a statement.

A five-month strike at the firm’s gold operations over pay and job cuts that ended in April and cost Sibanye more than $100 million in lost revenue hit gold output.

Bullion production for the period fell to 344 752 ounces compared to 598 517 ounces a year earlier.

Group adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) fell 47% to R2.069 billion for the six month period compared with R3.895 billion during the same period a year ago.

The diversified miner said that losses at its gold operations were offset by improved financial results from the South African and US PGM operations.

Adjusted Ebitda for the South African PGM operations rose 106% to R2.1 billion ($145 million) while the US PGM operations’ saw adjusted Ebitda up 36% to $208 million.

Froneman said a current supportive precious metals price and a positive operational outlook would benefit earnings and cash flow in the second half and facilitate rapid deleveraging and the possible resumption of the payment of cash dividends in 2020. 

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LOGIC ACCORDING TO UNIONS: The Unions must be happy with the company losses because now they can really demand big salary increases.

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