Sylvania Platinum focuses on the re-treatment and recovery of platinum group metals (PGMs) including platinum, palladium and rhodium, mainly from tailings dumps and other surface sources, but also lesser amounts of run-of-mine underground ore from Samancor chrome mines in South Africa.
Demand for PGMs dropped in 2023 and remains under pressure due to increased recycling of PGMs, particularly in China. Demand is likely to be muted in 2024, with inventories remaining high. In the longer term, we see significant headwinds for electric vehicles in most countries except China, and increased regulatory and emissions legislation pressure, driving increased PGM demand and positive price momentum. Production pressures in South Africa and Russia could provide a further underpin to prices.
Metals & Mining |
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Metals & Mining |
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Metals & Mining |
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Metals & Mining |
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Jaco Prinsloo
CEO
Lewanne Carminati
CFO
Forecast net cash (US$m)
92.9
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 13.3 | 15.7 | (27.3) |
Relative | 10.2 | 8.2 | (30.7) |
52 week high/low | 90.5p/50.4p |
Sylvania has maintained annual production guidance despite Q324 results being affected by a 22-day strike, resulting in 10% lower production. The PGM basket price was stable during the quarter, with positive platinum momentum offset by palladium weakness and rhodium prices stable. Operating costs increased by 5.6%, in line with expectations. FY24 production guidance is for 75,000–76,000oz, despite the challenges in Q324. Our PGM outlook is unchanged from our moderated forecasts earlier in the year. We have cut our FY24 EPS forecast by 2.2% from 7.4p to 7.2p on the Q324 miss, but have lifted our FY25 and FY26 forecasts slightly on the back a share buyback programme reducing the number of shares in issue. The company announced a special dividend of 1p/share following the sale of its Grasvally Chrome Mine for US$6.2m. We have lifted our valuation slightly to 120.0p/share due to a slightly weaker sterling and lower number of shares in issue, but have made no change to the carrying value of the exploration assets.
Y/E Jun | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 152.0 | 83.0 | 81.0 | 20.4 | 4.1 | 2.5 |
2023A | 130.0 | 66.0 | 67.0 | 16.7 | 5.0 | 2.9 |
2024E | 89.0 | 22.0 | 25.0 | 7.2 | 11.7 | 9.5 |
2025E | 110.0 | 37.0 | 36.0 | 9.3 | 9.0 | 6.9 |
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