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Northam Platinum has declared its first dividend in over a decade of R2.4 billion or R6 per share, resulting from the disposal of its stake in Royal Bafokeng Platinum. It has also established a dividend policy of a minimum of 25% of headline earnings and will buy back R1 billion of its own shares.
The platinum group metals (PGM) miner, valued at about R87 billion on the JSE, released its financial results for the year ended in June on Friday, reporting a 3.8% rise in operating profit to R15.4 billion.
A strong operational performance from its mines offset weaker metal prices, with its equivalent refined metal from its own operations rising 13% to 809 775 ounces. Mining inflation remains well above consumer price index levels, with chemicals, steel components, explosives and fuel all increasing well above quoted inflation, the group said, with its cash cost per refined ounce rising almost 13%.
Northam CEO Paul Dunne said that accepting Impala Platinum's cash and share offer to buy out its near 35% stake in RBPlats had significantly strengthened the group’s balance sheet and liquidity position, which in turn has enabled the group to declare its first dividend in over 10 years.
Northam said the RBPlat sale had strengthened the balance sheet and liquidity position, with net debt falling R9.4 billion from about 16 billion. The group received R9 billion in cash from the disposal, while it has also sold more than 90% of its Implats shares, bringing in R2.4 billion.
Northam last month announced it would sell to Impala its almost 35% stake in RBPlat, which it had acquired as part of a failed plan to eventually gain control of the company.
Northam had paid a premium for the shares but took the R4.1 billion hit in selling into Impala's lower offer price, which had been extended to all RBPlat shareholders.
On Friday Dunne, said accepting the Implats mandatory offer was considered to be a prudent response to a potentially protracted downturn in the PGM market.
In early trade Northam's shares were up almost 0.7% and have fallen almost a third in the year to date.
