Aim-listed Sylvania Platinum achieved a record performance for the six months ended December 31, despite disruptions relating to the holiday period shutdown and power and water supply constraints, outgoing CEO Terry McConnachie said on Monday.

He said it was evident that the corrective action and implementation of various improvement measures to address challenges experienced during the previous financial year were now showing results.

Sylvania expects its operations to achieve the previously announced production guidance of 74 000 oz to 76 000 oz of platinum, palladium, rhodium and gold (4E). 

“While the results for [the interim period] are excellent, the board is mindful of the potential challenges ahead and has, therefore, decided not to increase guidance until further clarity is obtained,” McConnachie noted.

For the period, Sylvania Dump Operations delivered 40 003 oz of 4E.

Revenue was $59-million, net of pipeline sales adjustments, an 84% improvement on the revenue of $32.1-million earned for the six months to December 31, 2018.

Group earnings before interest, taxes, depreciation and amortisation increased by 197% year-on-year to $36.7-million, while net profit was up 244% year-on-year at $23.9-million.

CHALLENGES

Sylvania is grappling with a number of challenges, including the availability of stable electricity supply in South Africa, which not only affects the company’s existing operations but also its expansion plans.

Moreover, intermittent rainfall and water shortages remain a key focus of the group, with mitigatory measures continuing to be explored to assist in the reduction of overall water losses in tailings.

Further, potential retrenchments at some of the host mines owing to the depressed chrome market, have necessitated the review of the group’s plant feed strategy.

However, the group also sees a number of opportunities.

Firstly, the current platinum group metals (PGMs) basket price is contributing to higher-than-planned profits and cash balances.

Moreover, post-commissioning evaluation of PGM grades and recovery optimisation projects, incorporating proprietary modifications at Millsell, Doornbosch and Tweefontein, identified an opportunity to roll this circuit modification out to the Mooinooi and Lannex plants to improve the upgrading and recovery of PGMs.

Further, the group remains debt free and continues to generate sufficient cash reserves to fund capital expansion projects.

BOARD CHANGES

Sylvania on Monday also announced the retirement McConnachie as CEO with effect from February 29.

He was appointed MD and CEO in late 2006 and is credited with Sylvania’s rapid development and growth.

He will assist the company in an advisory capacity for at least 12 months to provide continuity for Sylvania.

The company has appointed Johannes Jacobus Prinsloo to succeed McConnachie from March 1.

Prinsloo has served in senior positions at Sylvania since 2012 and, most recently, as MD of its South African operations.

Moreover, Lewanne Carminati has been appointed FD and CFO with effect from March 1.

Carminati joined Sylvania in 2009 and was, in 2011, appointed executive officer of finance for the South African operations.