Johannesburg - Sibanye-Stillwater (Tickers JSE: SSW and NYSE: SBSW) delivered solid operating results for the six months ended 30 June 2020 (H1 2020), with production from all the operating segments increasing year-on-year despite the challenges and disruptions posed by the global COVID-19 pandemic.
Along with significantly higher precious metal prices received for the period, the operational results underpinned a robust financial performance from the Group. Record six month adjusted EBITDA of R16,514 million (US$990 million) for H1 2020 was 718% higher than for the comparable period in 2019.
Normalised earnings of R8,845 million (US$531 million) and free cash flow of R10,921 million (US$655 million), resulted in an interim cash dividend of R1,338 million (US$79 million at US$/R16.97) being declared.
Ongoing reduction of debt and strong cashflows resulted in balance sheet leverage reducing from 1.25x net debt: adjusted EBITDA at the end of 2019 to 0.55x at the end of H1 2020.
Basic earnings of SA 351 cents per share (US 21 cents per share) and headline earnings of 350 cents per share (US 21 cents per share), were significantly higher than the SA 11 cents per share (US 1 cent per share) basic and SA 54 cents per share (US 4 cents per share) headline loss reported in H1 2019. The operating performance was solid with all the segments reporting improved production despite the COVID-19 challenges and disruptions.
The continued improvement in Group safety performance for H1 2020 was also noteworthy. Safe production milestones included the SA gold operations achieving a remarkable deep level hard rock safe production milestone of 12.4 million fatality free shifts by the end of H1 2020, close to two years fatality free, and the Group recording its first fatality free quarter (Q2 2020) since Q4 2018.
The US PGM operations continued to operate largely uninterrupted throughout H1 2020. Mined 2E PGM production of 297,740 2Eoz was 5% higher than for H1 2019, with recycled production of 397,472 3Eoz 6% lower, primarily due to a global slowdown of auto catalyst collections and deliveries and logistical constraints caused by the global imposition of COVID-19 restrictions.
4E PGM production from the SA PGM operations increased by 5% year-on-year to 657,828 4Eoz, with the inclusion of the Marikana operation for the full six month period offsetting lost production due to COVID-19 disruptions.
The integration of the Marikana operation has continued to progress positively, with identified annual synergies more than doubling from initial estimates of approximately R730 million per annum, to an estimated annual run rate of up to R1.85 billion in annual synergies by the end of 2020. Production from the SA gold operations of 12,554kg (403,621oz) for H1 2020 was 17% higher than for the comparable period in 2019, which was impacted by the AMCU strike across the managed SA Gold operations (excluding DRDGOLD).
The devastating effect of the COVID-19 pandemic extended beyond our operations however, with the impact in South Africa, severe. Significant efforts have been made and continue, to provide support to employees and community in an attempt to mitigate the consequences of the pandemic. In this regard over R1.5 billion in financial support has been provided to employees not at work during the period and over R100 million committed to community and government support.
Neal Froneman, CEO of Sibanye Stillwater commenting on the results, said: 'The manner in which the Group was able to navigate its way through the challenges posed by COVID-19, emerging in a robust financial position with Group leverage continuing to fall, while at the same time providing substantial financial and social support to employees and communities, was extremely pleasing. The SA operations are likely to achieve optimal production levels by Q4 2020, with the outlook for precious metals prices constructive, the operating and financial outlook for H2 2020 is extremely positive.
Contact:
James Wellsted
Tel: +27 (0) 83 453 4014
Email: ir@sibanyestillwater.com
FORWARD-LOOKING STATEMENTS
The information in this announcement may contain forward-looking statements within the meaning of the 'safe harbour' provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Stillwater Limited's ('Sibanye-Stillwater' or the 'Group') financial positions, business strategies, plans and objectives of management for future operations, are necessarily estimates reflecting the best judgment of the senior management and directors of Sibanye-Stillwater. All statements other than statements of historical facts included in this announcement may be forward-looking statements. Forward-looking statements also often use words such as 'will', 'forecast', 'potential', 'estimate', 'expect' and words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and should be considered in light of various important factors, including those set forth in this disclaimer. Readers are cautioned not to place undue reliance on such statements.
The important factors that could cause Sibanye-Stillwater's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, our future business prospects; financial positions; debt position and our ability to reduce debt leverage; business, political and social conditions in the United States, South Africa, Zimbabwe and elsewhere; plans and objectives of management for future operations; our ability to obtain the benefits of any streaming arrangements or pipeline financing; our ability to service our bond instruments; changes in assumptions underlying Sibanye-Stillwater's estimation of their current mineral reserves and resources; the ability to achieve anticipated efficiencies and other cost savings in connection with past, ongoing and future acquisitions, as well as at existing operations; our ability to achieve steady state production at the Blitz project; the success of Sibanye-Stillwater's business strategy; exploration and development activities; the ability of Sibanye-Stillwater to comply with requirements that they operate in a sustainable manner; changes in the market price of gold, PGMs and/or uranium; the occurrence of hazards associated with underground and surface gold, PGMs and uranium mining; the occurrence of labour disruptions and industrial action; the availability, terms and deployment of capital or credit; changes in relevant government regulations, particularly environmental, tax, health and safety regulations and new legislation affecting water, mining, mineral rights and business ownership, including any interpretations thereof which may be subject to dispute; the outcome and consequence of any potential or pending litigation or regulatory proceedings or other environmental, health and safety issues; power disruptions, constraints and cost increases; supply chain shortages and increases in the price of production inputs; fluctuations in exchange rates, currency devaluations, inflation and other macro-economic monetary policies; the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance; the ability to hire and retain senior management or sufficient technically skilled employees, as well as their ability to achieve sufficient representation of historically disadvantaged South Africans in management positions; failure of information technology and communications systems; the adequacy of insurance coverage; any social unrest, sickness or natural or man-made disaster at informal settlements in the vicinity of some of Sibanye-Stillwater's operations and the impact of HIV, tuberculosis and the spread of other contagious diseases, such as coronavirus ('COVID-19'). Further details of potential risks and uncertainties affecting Sibanye-Stillwater are described in Sibanye-Stillwater's filings with the Johannesburg Stock Exchange and the United States Securities and Exchange Commission, including the Integrated Annual Report 2019 and the Annual Report on Form 20-F for the fiscal year ended 31 December 2019. These forward-looking statements speak only as of the date of the content. Sibanye-Stillwater expressly disclaims any obligation or undertaking to update or revise any forward-looking statement (except to the extent legally required).
SIBANYE STILLWATER LIMITED 
