Sibanye thrives as higher commodity prices drive earnings

Sibanye SENS statement:

Trading statement for the year ended 31 December 2020

Sibanye-Stillwater is pleased to provide a trading statement for the year ended 31 December 2020. 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 it is satisfied that a reasonable degree of certainty exists that the financial results for the next period to be reported upon, will differ by at least 20% from the financial results for the previous corresponding reporting period.

The Group advises that it expects to report profit attributable to the owners of the Group of between R28,726m ($1,745m) and R29,898m ($1,816m) for the financial year ended 31 December 2020. This compares with and is substantially higher than profit attributable to the owners of the Group of R62m ($4m) for the previous financial year. Earnings per share (EPS) is expected to be between 1,053 SA cents (64 US cents) and 1,095 SA cents (67 US cents) compared with EPS of 2 SA cents (0.2 US cents) for the period ended 31 December 2019 with headline earnings per share (HEPS) between 1,047 SA cents (64 US cents) and 1,089 SA cents (66 US cents) compared with a headline loss per share of 40 SA cents (3 US cents) for the period ended 31 December 2019. This provides for a year-on-year increase well in excess of 100% (approximately 55x higher) in both EPS and HEPS.

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The expected increase in earnings was underpinned by a solid Group operational performance for 2020, despite the COVID-19 disruptions (as announced on 20 January 2021) and driven by higher metal prices and a weaker rand. The production contribution from the Marikana operations for the full 12-month period, following the acquisition of Lonmin in June 2019 and the realisation of significantly higher than forecast synergies, along with a notable return to profitability from the SA gold operations, following the strike in H1 2019, were the main drivers of this operational performance.

Average precious metal prices were significantly higher year-on-year, with the average 4E PGM basket price 83% higher to R36,651/4Eoz (US$2,227/4Eoz), the average 2E PGM basket price 36% higher to US$1,906/2Eoz (R31,373/2Eoz) and the average rand gold price 43% higher to R924,764/oz (US$1,747/oz). Depreciation of the rand relative to the US dollar also boosted revenue, with the exchange rate on average 14% weaker for the period at R16.46/US$.

These increases were partially offset by:

• Higher mining and income tax expenses

• Loss on the early settlement of the US$ convertible bond

• Fair value loss on deferred payment relating to the acquisition of the Rustenburg operation

The translation of rand amounts into US dollar is based on an average exchange rate of R16.46/US$ for 2020 and R14.46/US$ for 2019. This information is provided as supplementary information only.

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

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