Valt Technology Services H1 Earnings Call Highlights

Key Points

• Financial performance surged: First-half revenue rose 93% to ZAR82 billion, EBITDA quadrupled to ZAR33.4 billion, and free cash flow reached ZAR26 billion, supported by higher PGM prices and sales volumes. The company declared an interim dividend of ZAR57 per share, equal to 70% of headline earnings.
• Operations recovered and guidance was maintained: Production increased as Amandelbult recovered from flooding, while processing improvements lifted refined output and chrome yields. Full-year production, cost and capital expenditure guidance remained unchanged, with management expecting a stronger second half.
• Safety remains a major concern: Three work-related fatalities occurred during the first half, followed by another fatal incident at Amandelbult before the results presentation. The company has implemented safety stoppages, increased frontline oversight and commissioned an independent review of its safety practices.

Valt Technology Services LON: VALT reported a sharp increase in first-half earnings and cash generation, supported by stronger platinum group metals prices, higher sales volumes and the recovery of its Amandelbult operation following prior-year flooding.

Chief Executive Officer Craig Miller said the company remained on track to meet its full-year guidance, with a stronger second half expected as production and processing initiatives continue. The board declared an interim dividend of ZAR57 per share, or ZAR15 billion, representing 70% of headline earnings.

Safety incidents prompt further action

Miller opened the presentation by addressing safety, following three work-related fatalities during the first half and another fatal incident at the Tumela mine at Amandelbult shortly before the results presentation. The latest incident was under investigation, with further details expected in the third-quarter production report.

Valterra said it had conducted safety stoppages across its operations, increased focus on frontline leadership and accountability, and was undertaking an independent third-party review of its safety approach. Total recordable injury frequency rose 14% to 1.66, which Miller attributed largely to the normalization of shifts at Amandelbult after flooding in 2025.

“Our policies and procedures are good,” Miller said during the question-and-answer session. “We’ve just really got to work on the behavior and the implementation of those in order to ensure that everybody goes home safely.”

Revenue and EBITDA rise on prices and volumes

Chief Financial Officer Sayurie Naidoo said revenue rose 93% to ZAR82 billion during the first half of 2026, driven by an 85% increase in the PGM dollar basket price to $2,800 per ounce and 18% higher sales volumes. The stronger rand partially offset the pricing benefit.

EBITDA increased fourfold to ZAR33.4 billion, equivalent to the company’s full-year EBITDA in 2025, while headline earnings reached ZAR21.5 billion, or ZAR82 per share. Mining EBITDA margin was 50%, and annualized return on capital employed was 69%.

Free cash flow totaled ZAR26 billion, lifting net cash to ZAR23.7 billion at June 30 after the company paid a ZAR11.5 billion final dividend in March. Naidoo said liquidity headroom stood at ZAR55 billion, including cash and undrawn committed bank facilities.

The company also received the final ZAR1.5 billion tranche of its Amandelbult flood insurance claim after the reporting period, bringing total insurance proceeds net of deductibles to ZAR3.9 billion.

• Cash operating unit costs were flat at ZAR20,677 per PGM ounce.
• All-in sustaining costs declined 21% year over year to $996 per 3E ounce sold.
• Full-year unit-cost guidance of ZAR19,000 to ZAR20,000 per PGM ounce was maintained.
• Full-year capital expenditure guidance remained ZAR17 billion to ZAR18 billion.

Operational gains at Amandelbult and processing assets

Owned mined metal in concentrate production increased 9% to 1 million ounces, led by Amandelbult’s recovery from flood-related disruption in the prior year. Refined production rose 25% to 1.7 million ounces, including about 200,000 ounces unlocked through work-in-progress inventory optimization.

Miller said Amandelbult benefited from its return to steady-state operations, cost discipline and higher PGM and chrome output. The operation’s all-in sustaining costs have declined 8% in real terms over the past two years, he said, following a 2024 cost-base reset that included an 18% workforce reduction.

At Mogalakwena, mined head grade was stable as the company continued its blending strategy. Management expects access to higher-grade cuts and improved concentrator availability to support better second-half production. The company maintained Mogalakwena production guidance and said it expects the open pit to produce between roughly 900,000 ounces and 1 million ounces annually going forward.

Mototolo’s performance was affected by safety-related stoppages at the Borwa Decline, though development at Der Brochen increased 64% from the prior period. Immediately available ore reserves at Der Brochen rose 29%, improving operating flexibility, according to Miller.

Processing optimization improved concentrator recoveries at Amandelbult, Unki and Mogalakwena. Chrome yields at Amandelbult increased four percentage points, while group chrome yield improved two percentage points. The company said its processing initiatives have generated several hundred million rand in annualized capital and operating savings over the past two years.

Growth projects and market outlook

Development of the Sandsloot Underground project at Mogalakwena advanced by 1.5 kilometers to 10.7 kilometers during the half. Bulk ore samples increased by 35,000 tonnes, and the second ventilation shaft was reamed and lined. Management said sample results were in line with expectations.

Trial mining is expected to begin in the fourth quarter of 2026, with a feasibility study and final investment decision targeted for the first half of 2027. Medium-term capital guidance for Sandsloot remained ZAR1.5 billion to ZAR2.5 billion.

Miller said the company sees a tight medium-term PGM market, as increased industrial demand and weaker secondary supply offset lower autocatalyst demand and softer jewelry forecasts. He said the company expects opportunities in hydrogen, artificial intelligence-related industrial applications and the substitution of platinum and palladium for gold in certain uses.

Executive Head of Marketing Hilton Ingram said the company sees 350,000 ounces of ruthenium demand in hard disk drives currently and believes AI-related infrastructure could create substantial additional demand. He also said Valterra continues to see the potential for 900,000 ounces of platinum-group metals demand from gold substitution in industrial applications, with at least 300,000 ounces progressing through its current partnerships.

The company has initiated partnerships with Umicore in Germany and Pujing Chemicals in China, following earlier collaborations with Johnson Matthey and Sibanye-Stillwater, to expand industrial uses for PGMs.

Naidoo said the company’s dividend policy remains a base payout of 40% of headline earnings, although excess cash may be returned to shareholders after funding sustaining and discretionary capital requirements. She added that share buybacks remain available as a capital-return tool, but shareholder preferences and market volatility supported the decision to use an additional dividend in the current period.

About Valt Technology Services (LON:VALT)

Valterra Platinum is one of the world's leading integrated producers of platinum group metals (PGMs) with a primary listing on the Johannesburg Stock Exchange and a secondary listing on the London Stock Exchange. We operate world class, long-life mines and the industry's most efficient processing assets, safely and responsibly mining, smelting, and refining PGMs and associated co-products from operations located in South Africa and Zimbabwe. With integrated marketing hubs in London, Singapore and Shanghai, we deliver tailored solutions for our customers.

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