Miningweb: Sibanye-Stillwater flags soaring profits but impairments hit bottom line

Key topics:Headline earnings expected to surge over 100% in H1 2025, driven by strong South African gold and PGM operations.Basic earnings hit by major impairments at US PGM operations and Finland lithium project.Mixed production results, with SA gold output down but PGM prices rallying and recovery expected in H2 2025.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.JOHANNESBURG, SA – Mining giant Sibanye-Stillwater has signalled a dramatic turnaround in profitability for the first half of 2025, forecasting a more than 100% surge in headline earnings. However, significant impairment charges related to its US platinum group metals (PGM) operations and Finnish lithium project are set to weigh on basic earnings.In a trading statement released today, the diversified miner projected headline earnings per share (HEPS) – the primary profit measure in South Africa – to land between 180 and 200 SA cents for the six months ending 30 June 2025. This represents a staggering nineteen-fold increase from the 10 SA cents reported in the corresponding period last year.Sibanye Stillwater’s share price, however, dropped 4% to R36.12 immediately after the release of the results. The reason for the price decline is that despite the robust operational performance, the company expects to report a basic loss per share (EPS loss) of between 120 and 133 SA cents. While substantial, this marks a significant improvement of 55% to 60% compared to the 259 SA cents loss recorded in the first half of 2024.The disparity between the two earnings figures stems from significant non-cash impairment losses. A legislative change hit the US PGM operations, the "One Big Beautiful Bill Act," enacted in July 2025. This new law amends and schedules a phase-out of the Section 45X advanced manufacturing tax credits, which were previously considered evergreen under the Inflation Reduction Act. The change forced a downward revision of the assets' future value.Simultaneously, the Keliber lithium project in Finland was impaired due to lower long-term lithium price forecasts and a higher discount rate, which reduced its estimated recoverable amount..Read more:.Mantashe, Froneman clash publicly on how to offer US access to SA’s critical minerals.The surge in headline earnings was primarily driven by a robust performance from its South African operations. A 36% year-on-year increase in the average rand gold price provided a significant tailwind, boosting profitability at its gold mines. Furthermore, extensive restructuring and repositioning efforts across its SA PGM and gold operations during 2023 and 2024 have successfully improved operational profitability and reduced losses.Production figures revealed a mixed but generally stable operational performance. The SA PGM operations delivered a steady 804,252 4Eoz, in line with the previous year and within annual guidance. The company noted a sharp rally in PGM prices since May and suggested that if these prices hold, its SA PGM assets could see significantly higher earnings in the second half of the year.Conversely, the SA gold operations faced persistent challenges, with production declining 13% year-on-year to 300,191oz, falling below planned levels. While issues at the Driefontein and Beatrix mines have been mainly resolved, management's focus remains on addressing challenges at the Kloof operation. An increase in production is anticipated for the second half of the year.In the United States, mined PGM production was 141,124 2Eoz, reflecting a smaller, post-restructuring footprint. The recycling business, however, faced headwinds from unfavourable macroeconomic conditions impacting vehicle scrappage rates, leading to a 14% decline in 3E PGM ounces sold.Looking ahead, Sibanye-Stillwater expects operational constraints that led to a build-up of inventory and ore stockpiles—particularly at its smelters—to normalise in the second half of 2025. The company's full operating and financial results are scheduled for release on 28 August 2025.