By Kevin Crowley
Sibanye Gold Ltd. fell in Johannesburg trading as safety stoppages meant the biggest miner of South African gold produced less of the precious metal than it could have in the first half of the year.
“If everything had gone right, we know that’s highly unlikely, there’s 1.4 tons (45,000 ounces) of additional gold that we could have produced had we not had the disruptions,” Chief Executive Officer Neal Froneman said in an interview. “That would have resulted in much better revenue and costs.”
Sibanye’s headline earnings rose more than sixfold to 1.1 billion rand ($78 million) in the six months to June 30, the Westonaria, South Africa-based company said in a statement Thursday. Sibanye increased its first-half dividend to 0.85 rand a share, or 36 percent of normalized profit, compared with 0.10 rand a year ago.
“The financial results look very good and probably are very good but I know we did not achieve our potential,” Froneman said in Johannesburg.
Still, the stock dropped as much as 12 percent, the most on a closing basis since the company was spun out of Gold Fields Ltd. in 2013, to 57.05 rand, and was 3.2 percent lower at 62.80 rand by 4:20 p.m. in Johannesburg. It has more than doubled this year as higher bullion prices and a weak rand boosted margins.
“The shares were building in too-high expectations for earnings,” said Wayne McCurrie who helps manage 40 billion rand at Momentum Wealth (Pty) Ltd. in South Africa. “You never get 100 percent performance in South Africa. There are always safety stoppages or electricity supply problems or some kind of disruption.”