Our opinion on the current state of IMPLATS(IMP)Impala Platinum Holdings (IMP), or Implats, is the world's third-largest platinum group metals (PGM) producer.
It has been suffering over the past seven years from aggressive union action and legislative uncertainty. The CEO says that they are focused "...on developing a portfolio of long-life, low-cost, shallow, modern, mechanised mining assets." This is similar to what Anglo American Platinum has been doing for the past ten years.
The market for platinum itself has been damaged by a reduction in auto catalyst demand recently, especially for diesel trucks. Palladium and rhodium still have strong markets, but platinum has been oversupplied on world markets.
The company plans to grow its production from Zimbabwe by 14% due to the Mupani shaft coming on stream in 2022. Its newly acquired Canadian operation should also increase production.
On 20th July 2023, the company announced that it had acquired 56.52% of RB Plats as a result of its mandatory offer. Northam also announced its decision to sell its 34.5% holding to Implats.
On 28th June 2022, the company announced that it had reached a five-year wage deal with its major union, the Association of Mine Workers and Construction Union (AMCU), for an average wage increase of 6.6% per annum.
On 28th November 2023, the company reported that 11 people had died and 75 were hospitalised following an incident at its No. 11 shaft in Rustenburg.
In its results for the year to 30th June 2024, the company reported revenue down 18.9% and headline earnings per share (HEPS) down 87.8%.
The company said, "Significantly weaker US dollar sales revenue offset the benefit of strong operational delivery in FY2024 - average palladium and rhodium pricing dropped sharply, negating higher sales volumes and compressing operating margins and free cash flow."
In an update on the first quarter to 30th September 2024, the company reported production volumes down by 5% but maintained production volume guidance.
The company said, "Implats is on track to deliver our previously provided operational, cost and capital expenditure guidance in FY2025."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would fall by between 40% and 49% due to an 8% drop in the rand price of 6E PGMs, which offset cost controls and higher output.
Technically, the share was in a downward trend from March 2022 to March 2024, mainly as a result of lower PGM prices, increased costs, and load-shedding. It has recovered somewhat since then but remains a volatile commodity share.
