Platinum group metals (PGMs) miner Impala Platinum (Implats) expects to report an increase of between 318% and 338% in headline earnings to between R14.1-billion and R14.7-billion, for the six months ended December 31, 2020.

The compares with the earnings of R3.3-billion reported for the six months ended December 31, 2019.

Headline earnings a share are expected to increase by between 316% and 336% year-on-year to between R18.12 and R18.99.

The increase in earnings was partially offset by a one-off noncash International Financial Reporting Standard 2 black economic empowerment (BEE) charge of R1.5-billion, or R1.94 per share (no tax impact), arising on the Marula BEE loan refinancing.

Further, basic earnings for the period are expected to increase by between 627% and 647% year-on-year to between R24.7-billion and R25.4-billion, while basic earnings a share are expected to increase by between 624% and 644% to between R31.78 and R32.65.

This includes the aggregate impact of the reversal of impairment losses on property, plant and equipment and the prepayment of royalties of R10.6-billion recognised in prior periods.

This reversal is owing to changes in the estimates, particularly long-term metal prices, used to determine the recoverable amount of Impala Rustenburg assets, Implats explained on February 9.

Impairment reversals are noncash and have been excluded from headline earnings.

In terms of the miner’s operational performance, it says it is likely to report a 9% year-on-year increase in ruthenium, rhodium, palladium, osmium, iridium and platinum (6E) PGMs production to more than 1.6-million ounces.

While volumes benefitted from the inclusion of production from Impala Canada, the group’s refined 6E PGMs production for the period is expected to increase by 29% to almost 1.7-million ounces, from 1.3-million ounces in the comparative period.

The increase in refined 6E PGMs production is primarily owing to constrained processing capacity in the comparative period when planned smelter maintenance resulted in a stock build-up.

In addition, reported volumes in the period benefitted from the inclusion of saleable production from Impala Canada. Robust dollar pricing for PGMs, together with rand depreciation and sustained operational delivery, has resulted in higher revenues received by the group during the period.

Implats will release its interim results on or about February 25.