Sibanye Narrows Annual Loss as Palladium Rally Boosts Earnings

(Bloomberg) -- Sibanye Gold Ltd. said its full-year loss narrowed as higher platinum-group metal prices and the inclusion of its U.S.-based operations boosted earnings.

The precious-metals producer expects to report a $77 million attributable loss in the year through December, an improvement from the $333 million loss reported in 2017, it said in a statement Thursday. While Sibanye said earnings were boosted by a rally in palladium prices and “significantly higher” basket prices for PGMs, the year was soured by a spike in workers’ deaths and a strike by one of the largest unions over wages at its gold mines in South Africa.

“Improvements were partly offset by losses from the South Africa gold operations due to safety incidents in the first half of 2018 and the Association of Mine Workers and Construction Union strike towards the end of the year, as well as significant decline in the deferred tax rate adjustments relative to 2017,” Sibanye said.

Three of the company’s gold mines are experiencing a strike by thousands of workers allied to AMCU. In January, Sibanye lowered its 2018 gold-output forecast to about 1.1 million ounces, from a previous projection of 1.13 million ounces to 1.16 million ounces. The company’s gold mines, some of the world’s deepest, contribute about a quarter of Sibanye’s total revenue. The miner has diversified into platinum-group metals, acquiring assets in southern Africa and the U.S.

Sibanye will report a basic loss per share of 44 South African cents versus a loss of 229 cents year-on-year when it releases earnings next week. It expects positive headline earnings per share of 65 cents, compared to a 12 cents headline loss before, it said.

©2019 Bloomberg L.P.