South African tycoon Neal Froneman-led Sibanye-Stillwater posts lower earnings

Sibanye-Stillwater, a multinational precious metal mining group led by South African businessman Neal Froneman, has reported a substantial decrease in its headline earnings at the close of the 2022 fiscal year. This decline is attributed to the disruptions to its gold operation during the year.

According to its recently published financial results, the Neal Froneman-led group saw a 49.6-percent decline in its headline earnings, the primary profit measure in South Africa. The figures dropped from R36.9 billion ($2.5 billion) in 2021 to R18.42 billion ($1.12 billion).

The double-digit decline in headline earnings can be attributed to various factors, including industrial action in South Africa, flooding events in the United States, and a significant increase in unit costs. These issues led to reduced production from the group’s gold operations in South Africa and the United States throughout 2022.

Furthermore, the phased resumption and build-up of safe production after the operational stoppages also had a negative impact on production and costs in the latter half of the year.

As a result, the group’s revenue dropped by 20 percent, reaching R138.3 billion ($8.4 billion) in 2022 compared to R172.2 billion ($11.6 billion) in 2021.

Froneman, Sibanye-Stillwater’s CEO, provided his assessment of the group’s financial results for 2022. He acknowledged the significant positive achievements in some areas while highlighting the notable challenges in others.

Froneman revealed that the group’s operating and financial results for 2022 were affected by several external factors, including a more challenging macroeconomic and geopolitical environment.

Additionally, severe weather events in Montana had a considerable impact on the group’s U.S. precious metal operations.

Due to the decline in earnings, the board of directors of the group announced a final dividend of R3.5 billion ($191 million), which is less than the R7.37 billion ($421 million) full-year dividend paid out to shareholders in 2021.

The recently published financial results had an adverse impact on investor sentiment, resulting in a 1.27 percent decline in the company’s share price on the Johannesburg Stock Exchange during trading hours today.

At the current share price of R36.64 ($2.01), Sibanye-Stillwater’s market capitalization is valued at R105 billion ($5.78 billion).

Meanwhile, Froneman’s stake in the company has a market value of R77.7 million ($4.28 million).