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.
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Jaco Prinsloo
CEO
Lewanne Carminati
CFO
Forecast net debt (US$m)
92.9
Forecast gearing ratio (%)
36
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 14.0 | (5.1) | (29.9) |
Relative | 12.7 | (9.6) | (29.7) |
52 week high/low | 93.5p/50.4p |
Sylvania Platinum’s H124 results suffered from a lower PGM basket price. Our new, more conservative PGM outlook, has resulted in downgrades to our forecasts and valuation. Our value of 118.1p per share includes 16.1p per share for the new Thaba joint venture, which will augment PGM production and add a chromite concentrate revenue stream. Our value for exploration assets (included above) has stayed flat at book value of 13.8p per share, although it offers upside as a recently released mineral resource estimate shows these assets steadily moving towards production. The cash position at end 2023 is strong at US$107.2m.
Y/E Jun | Revenue (US$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 | 4.0 | 2.4 |
2023A | 130.0 | 66.0 | 67.0 | 16.7 | 4.9 | 2.8 |
2024E | 91.0 | 24.0 | 27.0 | 7.4 | 11.1 | 9.0 |
2025E | 110.0 | 37.0 | 36.0 | 9.2 | 8.9 | 6.6 |
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