Royal Bafokeng Platinum has paid a total R1.5 billion dividend for the first six months of the year, after the mining company bolstered its gross profit by over 300% year-on-year to R5.1 billion.
The company's strong performance, like most miners in the sector, was underpinned by buoyant platinum prices. The rand basket price of platinum group metals during the period under review jumped by 50%. The mining group now has a net cash position of R3.6 bililion.
But the market did not appear to appreciate the miner's set of "record results" as the share price tumbled throughout the day to close 8.5% lower at R105.72.
Simon Brown, market commentator at Just One Lap, speculated that the reaction to the firm's results could have been that the market was hoping for a higher dividend, following the whopping payout made fellow platinum producer last week, Anglo American Platinum, which paid out 100% of interim headline earnings at R175 per share.
Brown stated that the comparison of the two companies may be irrational given the big difference in their size. Production levels might also have been an unexpected factor in the results, with guidance for the full year revised to between 4.60-million tons and 4.75-million tons.
But CEO Steve Phiri hailed the company's performance during a period characterised by Covid-19 challenges.
"For many years we worried about our debt levels, and slowed down projects to ensure that we continue to spend during difficult years and benefit from the rising metal prices as we ramp up," said Phiri.
Phiri said now they "cannot help but smile a bit" and thanked those who stood by them during the "difficult times" to help put the company where it is now.
Based on the company's strong operational performance, the steady but solid ramp-up to capacity at Styldrift and its net cash position, the company could declare a dividend of R5.35 per share.
Revenue rose to R9.5 billion, with the Styldrift mining segment contributing R4 billion.
Phiri said the company's key operational focus areas for the second half of 2021 are aimed at developing operating maturity to leverage the infrastructure capabilities of Styldrift, the firm's mechanised underground mine, where construction on an expansion project is nearing completion.
There was a 39.2% increase in Styldrift tons milled. Phiri said the upgrade of the Maseve concentrator had been delayed into the fourth quarter.
The company, which was listed on the JSE ten years ago, paid taxes and royalties amounting to R1.5 billion.