By Felix Njini
NAIROBI (Reuters) -Northam Platinum declared its first dividend payout after bolstering its cash position by selling a stake in Royal Bafokeng Platinum (RBPlat) to rival Impala Platinum.
The Johannesburg-based platinum group metals producer said it would pay investors 600 rand cents a share, or 2.4 billion rand ($129 million), and has also announced a share buyback program of up to 1 billion rand of 5% of the company’s shares.
Northam is returning money to investors after selling the RBPlat shares to Impala for about 9 billion rand in a transaction that ended a protracted battle for control of the smaller platinum miner it had sought to buy.
The platinum miner also said it planned to pay out 25% of its headline earnings in future, a level which UBS analysts called “lacklustre” and below investors’ expectations.
“The 25% minimum payout ratio is below our medium-term expectation of 50% implying a poor market outlook and increased potential for poor capital allocation,” UBS analyst Steve Friedman said.
The payout and share buyback comes “despite the challenging PGM pricing and operating environment”, CEO Paul Dunne said.
($1=18.8675 rand)
($1 = 18.6594 rand)
(Reporting by Felix Njini; editing by Clarence Fernandez and Jason Neely)