Sibanye-Stillwater posts $3.4B write-down

South Africa’s Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) has flagged a 47.5 billion rand ($3.4 billion) impairment on last year’s results due to tumbling platinum, palladium and nickel prices. 

The company expects to report in March a loss per share for 2023 of 12.68 rand to 14.01 rand, compared with a profit of 6.51 rand a share the previous year, it said on Wednesday. This is equivalent to an eye-popping 91% drop in annual profit.

“We have already taken proactive steps to address loss-making production at unprofitable operations,” the company said. “The group remains focused on ensuring the sustainability of our business and delivering on our strategical essentials through this period of low commodity prices.”

The announcement comes only two months after the Johannesburg-based miner announced it would lay off 1,500 workers from its gold mines. It also said at the time it had began talks that could affect 4,000 more employees at its platinum group metals (PGMs) operations, including those in the United States.

Shares drop

Sibanye shares fell more than 5% in Johannesburg to close at 19.94 rand apiece. The company, valued at 56.4 billion rand, has lost almost half of its value in the past year, mainly due to falling palladium and rhodium prices.

The sharp drop of PGM prices has driven producers to apply severe cost-cutting measures. Anglo American‘s (LSE: AAL) platinum unit said on Monday it would cut 3,700 jobs at its South African operations, 17% of its workforce. 

Impala Platinum Holdings (JSE: IMP) has offered voluntary job cuts, including at its deep-level Rustenburg complex.

Despite the challenges, Sibanye said all its South African and Australian operations were profitable before the end of the fourth quarter of 2023. Annual gold production improved “significantly” over 2022 to 646,680 oz. despite a shaft hoist malfunction in July that limited output, the company said.