Sibanye Stillwater reports impairments but forecasts significant earnings growth

Sibanye Stillwater’s share price gave up some of its sharp 12-month gains and fell 3.5% on Friday after it reported impairments for its US platinum operations and on its Keliber lithium project, and despite forecasting a 19-times increase in headline earnings per share (HEPS).

The multinational mining and metals processing group headquartered in South Africa with gold and platinum and other operations on five continents said HEPS for the six months to June 30 was expected to be between 180 cents and 200 cents, representing an increase of more than 100% compared with the 10 cents reported last year.

The basic earnings per share loss was expected to be between 120 cents and 133 cents, a 55% to 60% improvement compared to an EPS loss of 259 cents in the first half of 2024. Friday’s closing share price of R36.32 was up 90% from R19.11 a year before.

The difference between positive HEPS and the basic loss per share was mainly due to the impairment losses on the US PGM operations and the Keliber project.

The impairment of non-financial assets at the US PGM operations was a consequence of the One Big Beautiful Bill Act (OBBBA) signed into US law on July 4, 2025. The OBBBA amended the treatment of credits for critical minerals, which was previously assumed to be evergreen.

Under the amended terms, the credits will be phased out in equal annual increments from 2031 to 2034, after which they will be terminated.

The impairment of the Keliber project is primarily due to lower forecast lithium prices and a change in the assumed discount rate which reduced forecast cash flows and the estimated recoverable amount.

The substantial increase in HEPS was due to improved profitability from the SA gold operations, after a 36% increase in the average rand gold price year-on-year, improved operational profitability of the South Africa PGM and gold operations, and reduced losses at the US PGM operations following restructuring in the first half.

These were also offset by estimated fair value losses on gold hedge contracts for the second half, and operational constraints at the SA PGM and SA gold operations during the first half, which increased inventory and ore-stockpiles, and lower than produced metal sales.

At the US PGM operations, the start-up and commissioning of Electric Furnace 2 after a rebuild and the decommissioning of Electric Furnace 1 resulted in a buildup of inventory and lower metal sales during the second quarter. Inventories were expected to normalise in the second half.

Production from all group operations other than the SA gold operations was consistent year-on-year and within annual guidance ranges for 2025.

The SA PGM operations delivered steady operating results, with production consistent with last year and costs well managed.

PGM prices had rallied sharply since May 2025, with the average basket price 19% higher than for the first half of 2025. Should these higher prices continue in the second half, “the SA PGM operations are likely to experience significantly higher earnings,” the group said.

The operational challenges that impacted production from the South Africa gold operations resulted in production declining 13% year-on-year to 300,191 ounces, below planned levels.

Challenges at the Kloof operation were receiving management focus, while operational issues at Driefontein and Beatrix operations were largely resolved with production recovering towards the end of the first half.

Production from the South Africa gold operations was expected to increase in the second half, boosting revenue and earnings, should the gold price remain at current levels.

Production from the US PGM recycling operations remained consistent.

The Reldan recycling operations sold 63,992 ounces of gold, 932,712 ounces of silver, 8,020 ounces of platinum, 11,557 ounces of palladium, and 1.53 million pounds of copper. The interim results are expected to be released on August 28.

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