Royal Bafokeng Platinum (RB Plats) has released annual results for the year ended December 2021. This has been a wonderful period for the platinum group metal (PGM) players, who deserved a break after years of pain.

Market cycles are incredible things. To give an idea of how severe the swings can be, RB Plats’ return on capital employed in 2014 – 2017 ranged from -29.4% to +3.3%. In 2020 it was 17.7% and in 2021 it increased to 22.4%!

As a reminder, Impala Platinum (Implats) has made an offer for RB Plats. The latter’s independent board has recommended the Implats offer to shareholders, with the caution that there is still a chance of another offer being made. The Takeover Regulation Panel (TRP) is still investigating whether Northam Platinum (which bought out Royal Bafokeng Holdings) should also be required to make a mandatory offer.

Shareholders in RB Plats will hopefully obtain clarity on this soon.

The Implats offer is R90 cash and 0.3 Implats shares per RB Plats share, so the RB Plats share price will fluctuate based on the Implats share price and the possibility of an offer from Northam Platinum.

In 2021, RB Plats grew revenue by 22.8%. This was assisted greatly by record production: 12.1% growth in tonnes hoisted, 16% growth in tonnes milled and 11.5% growth in 4E metals in concentrate.

Cash operating costs per tonne or per ounce (as appropriate) increased by single digits, well below the revenue growth rate. This led to a 28.3% increase in EBITDA to over R8.5 billion, an EBITDA margin of 51.9% (up from 49.7% the prior year).

The percentage increase was even higher at net profit level, with headline earnings per share (HEPS) up by 71.6%.

After capital expenditure of R1.8 billion in 2021 that was almost identical to 2020’s level, there’s lots of free cash flow to go around. This drove a massive jump in the dividend of 86.1% to R10.70 per share.

Please note that the final dividend was R5.35 per share, so investors who come onto the register this month will only receive that amount and not the R10.70 per share.

All eyes are on the TRP and a final answer on whether Northam Platinum needs to make an offer.