Operating update and trading statement for the six months ended 30 June 2018

H1 2018 operating update

The Southern Africa (SA) PGM operations have produced approximately 17,700kg (569koz) of 4E PGMs at an All-in sustaining cost (AISC) of approximately R10,110/4Eoz (US$820/4Eoz) for H1 2018. This solid operational result translates into an annual guidance which will target the top end of 4E PGM production guidance and AISC towards the bottom end of guidance. We are also pleased to advise that the average 4E basket price increased by 8%, from R12,006/4Eoz in H1 2017 to R12,941/4Eoz in H1 2018. This basket price increase together with the good operational performance has resulted in the adjusted EBITDA* from the SA PGM operations more than doubling relative to H1 2017, to approximately R1 billion (US$81 million).

The United States (US) PGM operations have produced approximately 294koz of 2E PGMs at an AISC of approximately US$653/2Eoz. This is also a solid operational performance in line with annual production and cost guidance for 2018. The average 2E basket price increased from US$850/2Eoz in H1 2017 to US$993/2Eoz in H1 2018, resulting in expected adjusted EBITDA from the US region of approximately R1.9 billion (US$150 million).  This is significantly more than the same period last year where the US PGM operations were only included for 2 months in the H1 2017 results.

The SA gold operations have produced approximately 18,610kg (600koz) of gold, at an AISC of approximately R520,000/kg (US$1,315/oz). This operational performance has been achieved despite the very significant safety related disruptions on the SA gold operations.  At an average gold price of R519,994/kg in H1 2018, the SA gold operations are expected to contribute approximately R1 billion (US$82 million) to Group adjusted EBITDA.  This compares to R2.3 billion (US$171m) for H1 2017.

The average exchange rate in H1 2018 was R12.31/US$ compared with R13.21/US$ in H1 2017.

Trading statement

In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited (JSE), a company listed on the JSE is required to publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from the financial results for the previous corresponding period.

Shareholders are advised that the Sibanye-Stillwater Group expects to report an attributable profit to shareholders of R77 million (US$6 million) for H1 2018, compared with an attributable loss of R4,804 million (US$364 million) for the six months ended 30 June 2017 (H1 2017).

The significant improvement year-on-year primarily reflects inter alia, the improved operational performance from our PGM operations, the inclusion of a full six months from the United States (US) region, compared with two months in H1 2017 and no material non-recurring items. Non-recurring items which were recognised during H1 2017 included impairments of R2,796 million, an occupational healthcare obligation of R1,077 million , and transaction costs of R402 million.

As a result, the Group expects to report significantly increased earnings per share (EPS) of 3 cents (0.28 US cents) and headline earnings per share of 4 cents (0.36 US cents) for H1 2018, representing a 101% increase in EPS and a 103% increase in HEPS, year-on-year.

The Group reported a 298 cents (23 US cents) loss per share and 135 cents (9 US cents) headline loss per share for H1 2017.

The financial information on which this trading statement is based has not been reviewed or reported on by Sibanye-Stillwater’s auditors.

Results presentation

Sibanye-Stillwater will release its results for the six months ended 30 June 2018 on Thursday, 23 August 2018 after 08:00 (CAT) and will host a live presentation and webcast at 10:00 (CAT). For the webcast and conference call details, please refer to our website at https://www.sibanyestillwater.com/….

* The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see financial statements. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. 

FORWARD LOOKING STATEMENTS

This announcement includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “target”, “will”, “forecast”, “expect”, “potential”, “intend”, “estimate”, “anticipate”, “can” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The forward-looking statements set out in this announcement involve a number of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and generally beyond the control of Sibanye-Stillwater, that could cause Sibanye-Stillwater’s actual results and outcomes to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this announcement. Sibanye-Stillwater undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this announcement or to reflect the occurrence of unanticipated events, save as required by applicable law.