Valterra Platinum's transition year: Profit falls 81% as new opportunities emerge
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Valterra Platinum's half-year profit slumped 81% in a pivotal period of transition that saw the demerger from Anglo American, the launch of a new identity, and a secondary listing on the London Stock Exchange.
Valterra's share price slipped 2.19% on the JSE Monday morning to R855.90 after the release of the results for the six months to June 30, but the price is nonetheless 22.5% higher than at the same time last year.
Headline earnings per share fell 81% to R4.73 per share, mainly due to demerger costs and lower output. Headline earnings came to R1.2 billion, down from R6.5bn in the same period last year.
Platinum group metals (PGM) sales fell by 25% to 1.48 million ounces, due mainly to the impact of flooding at its Amandelbult operations after heavy rains in February. The interim dividend of R2 per share was 79% lower than a year before. Own mined M&C (mining and concentrating) production, excluding Amandelbult, was in line with the prior year at 770 000 ounces.
Updating shareholders on the transition process on Monday, CEO Craig Millar said they had reconstituted an independent board of directors and significant progress had been made in transitioning from Anglo American's centralised services. Transitional agreements were in place for some services, while other skills had been recruited where necessary.
He said the group had responded swiftly to the extreme flooding at Amandelbult, and as a result, the Tumela Mine lower section was recommissioned ahead of schedule in June, with full ramp-up expected in the third quarter.
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Some 450 000 - 480 000 ounces of M&C PGM production was forecast for Amandelbult for the year, and normalised production was expected in 2026.
The pre-feasibility study for the Sandsloot underground project had been completed.
'The investment case for Sandsloot is compelling, and our approach remains 'value over volume' with the potential to introduce higher underground grades at between 4 grams to 6 grams per ton to blend with open cast ore. This is the first step towards our targeted 10% to 50% overall increase in Mogalakwena M&C production and a 10% to 20% reduction in AISC (all-in sustaining cost).'
Post the pre-feasibility study completion, medium-term capital guidance for Sandsloot Underground had been reduced to between R1.5bn and R2.5bn per year to advance the project, from R2bn to R3.3bn previously. An investment decision was expected to be made in the first half of the 2027 financial year.
Looking to the second half, Millar said they had reaffirmed their 2025 M&C and refined production guidance, and the group was on track to deliver R4bn in full-year operating cost savings. The liquidity headroom was healthy at R27bn.
During the first half, refined PGM production fell by 22% to 1.39 million ounces due to lower M&C production and a three-yearly stock count at the Precious Metals Refinery. The previous year's volumes also included built-up work in progress inventories.
PGM sales volumes fell by 25% to 1.48 million ounces, in line with lower refined production.
AISC were $962 per 3E ounce, 1% higher than the first half of 2024, excluding the Amandelbult flooding impact, or $1 213 per 3E ounce including the flooding impact.
Progress on the Sandskloof project during the period included a bulk ore sample of 31 000 tons of reef stockpiled, 12.8km of exploration drilling and advancing the decline development by a further 1.6km during, bringing total exploration drilling since inception to 43km and the cumulative decline development to 8km.
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