The key take-away from Sylvania Platinum Ltd's Q222 report is expense control delivered on both cash cost per oz (-5.5% on Q1) and direct operating costs (-1.4%). This trend could deliver sustained margin benefits even if production disruptions and a delayed recovery in average gross basket prices have a dominant impact on FY22 expectations. Our valuation of 175p/share as at October 2021 initiation presents meaningful upside from current levels of 93p with production declines receiving attention and René Hochreiter expecting a near-term PGM basket uptick with improving demand dynamics (see his long-term outlook published in December). A large cash pile of USD110.1m after US$27.5m in dividends and taxes bodes well for a healthy payout, including a likely windfall dividend. 1H22 results are out on 21 February 2022.
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