Sibanye prof its spike

Sibanye Gold‚ the largest producer of South African gold‚ will report a sharp increase in profit for the interim period‚ tempered by an R820-million impairment of its Cooke 4 mine. Sibanye‚ which has gold and platinum mines‚ has reaped the benefits of a weak rand since the end of last year when President Jacob Zuma surprised the market and changed finance ministers twice in a space of days. Sibanye‚ the company formed when Gold Fields unbundled three deep-level gold mines in 2013‚ said it would generate earnings per share in the six months to the end of this month that were up to 110% higher than the 20c reported in the same period a year earlier. It gave a range of 14c and 22c for headline earnings. Basic earnings would be negatively affected by the Cooke 4 impairment.

Headline earnings per share‚ which strip out exceptional items‚ would rise by up to 611%‚ Sibanye said‚ giving a range of between 92c and 116c per share compared with 19c a year ago. Sibanye said it had impaired Cooke 4‚ which is one of four Cooke shafts in a mining complex near Randfontein‚ because of continued under-performance. The company has started talks on retrenchments at the mine. Sibanye said its normalised earnings‚ which accounted for movements in foreign exchange and financial instruments‚ were forecast to be up to 848% higher‚ with a range of between 183c and 229c per share compared with 27c a year earlier. Normalised earnings excluded the 120% increase in Sibanye’s share price during the interim period that resulted in a fair value loss of R1.18-billion for financial instruments related mainly to share-based payments. – BDlive