Sibanye Stillwater Limited — 2022 Form 20-F
Reporting period: Fiscal year ended 31 December 2022; filed 24 April 2023. This is an annual report, not a standalone Q4 filing. Financial statements are prepared under IFRS and presented primarily in South African rand (R).
Business context
Sibanye-Stillwater is a multinational mining and metals-processing group with operations and investments spanning precious metals, recycling, tailings retreatment and battery metals. Its principal producing regions are Southern Africa and the United States; its European portfolio expanded in 2022 through the Sandouville nickel refinery acquisition and increased ownership of the Keliber lithium project.
Financial and operating performance
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | R138.3bn | R172.2bn | -20% |
| Profit for the year | R19.0bn | R33.8bn | -44% |
| Profit attributable to owners | R18.4bn | R33.1bn | -44% |
| Adjusted EBITDA | R41.1bn | R68.6bn | -40% |
| Cash from operating activities | R15.5bn | R32.3bn | -52% |
| Adjusted free cash flow | R9.5bn | R37.4bn | -75% |
| Net cash | R5.9bn | R11.5bn | Lower by R5.6bn |
Adjusted EBITDA margin was approximately 29.7%, versus 39.8% in 2021; IFRS profit margin was approximately 13.7%, versus 19.6%. Adjusted EBITDA and adjusted free cash flow are non-IFRS measures and may not be comparable with similarly named measures at other companies.
Liquidity and debt: Year-end cash and cash equivalents were R26.1bn, total assets exceeded liabilities by R91.0bn, and committed undrawn facilities were R16.4bn. Borrowings with recourse to Sibanye-Stillwater were R20.2bn; total balance-sheet borrowings were R22.7bn, including Burnstone debt. The reported net cash-to-adjusted EBITDA ratio was 0.14x net cash. On 6 April 2023, the Group refinanced and increased its US dollar revolving credit facility from US$600m to US$1bn.
Capital returns: The Board declared a final dividend of 122 cents per share, bringing the 2022 full-year dividend to 260 cents per share, or R7.36bn in total. This represented 35% of normalised earnings and an indicated yield of about 6% based on the cited year-end share price.
Production: 2022 production included 621koz of gold, 1.7Moz of South African 4E PGMs, 421koz of US 2E PGMs, approximately 599koz of recycled 3E PGMs and 6.8kt of nickel. Output and sales were disrupted across several operations.
Material changes versus 2021
- Lower revenue and earnings reflected reduced sales volumes, lower PGM prices, a three-month strike at the South African gold operations, seven weeks of lost US PGM production following Montana flooding, and reduced autocatalyst recycling throughput.
- Cost of sales before amortisation and depreciation fell 6% to R94.5bn, but per-unit costs rose at several operations because lower production spread fixed costs over fewer ounces and inflation raised input costs.
- South African gold production fell 50%; gold revenue from the managed operations fell 47%, and their adjusted EBITDA turned negative at R3.5bn.
- US mined 2E production fell 26%; US underground AISC rose 58% to US$1,586/2Eoz. Recycling production fell to about 599koz from 755koz.
- South African PGM production was lower, while AISC rose 14% in rand terms to R19,313/4Eoz. The Rustenburg and Marikana operations concluded five-year wage agreements; the SA gold operations concluded a three-year agreement after industrial action.
- Total capital expenditure increased to R15.9bn from R12.7bn. A maiden Keliber lithium reserve was declared, and the Group increased its Keliber holding to 84.96%.
Outlook, management commentary and risks
2023 guidance: US PGM production of 500–535koz 2E, with AISC of US$1,400–1,500/oz; US recycling of 450–500koz 3E; SA PGM production of 1.70–1.80Moz 4E, with AISC of R20,800–21,800/4Eoz; and SA gold production, excluding DRDGOLD, of 23,500–24,500kg, with AISC of R950,000–R1,020,000/kg. Guidance excludes unplanned events. Sandouville nickel sales guidance is 9.5–10.1kt. Management estimated total 2023 capital expenditure of about R20.5bn and said capital expenditure was expected to peak in 2023–2024 and decline thereafter.
The US PGM operations were repositioned toward steady-state production of 700koz 2E annually at AISC below US$1,000/oz by 2027. Keliber targets nameplate production of 15,000 tonnes of lithium hydroxide per year by 2025; its approved project capital is €588m, targeted to be funded 50% with debt and 50% with equity. Some permits and conditions remained subject to appeal. Sibanye-Stillwater’s funding commitment to the Rhyolite Ridge joint venture is conditional on required permits and other conditions; ioneer received a conditional US Department of Energy loan commitment of up to US$700m.
Key risks and unusual items: South African electricity shortages and load curtailment, organised crime and copper-cable theft, labour relations, commodity-price and exchange-rate volatility, cost inflation, climate-related extreme weather, permitting and community expectations are prominent risks. Five work-related fatalities occurred in 2022; management also reported five fatalities after year-end at Driefontein and the Burnstone project as of 14 April 2023. A shaft overwind incident at Stillwater in March 2023 temporarily suspended production. The Group reported a R4.3bn net loss on financial instruments, including fair-value losses on deferred payments, B-BBEE obligations and hedges. An Appian-affiliate claim relating to terminated Brazilian mine purchase agreements is in litigation; the filing text does not provide a clear claim value. A correction to prior-period accumulated profit and non-controlling interests reclassified R544m between equity categories; verify the note for its period-by-period presentation.
EY issued an unqualified audit opinion on the IFRS financial statements and an unqualified opinion that internal control over financial reporting was effective at year-end. Selected sustainability indicators received limited assurance, not reasonable assurance.
Important facts for investors to verify
- Reconcile the R5.9bn net cash measure to balance-sheet borrowings and cash, noting that management’s net debt definition excludes Burnstone debt and cash.
- Review cash-flow conversion, capital expenditure, and the 2023 funding needs of Burnstone, K4 and Keliber against commodity-price assumptions.
- Check progress against 2023 production and cost guidance, especially the effects of power curtailment, safety events, staffing and operational recovery.
- Track permitting, construction, funding and offtake milestones for Keliber and Rhyolite Ridge, and integration and operating performance at Sandouville and New Century.
- Review the Appian litigation, the post-year-end safety incidents, and the status of the US dollar revolving credit facility refinancing and its covenants.