Valterra shares to be volatile amid “challenging” first half

SHARES in Valterra Platinum were likely to be volatile, especially from next week when it is formally demerged from parent company Anglo American, said the firm’s CEO Craig Miller.“Today is when we trade as Valterra Platinum,” Miller said on the sidelines of his firm’s listing launch on the JSE on Wednesday. “But we will not see the level of liquidity until next week.”On Monday, Anglo will distribute a dividend in specie representing 47.1% of its stake in Valterra, formerly Anglo American Platinum. The UK group will retain a 19.9% stake in Valterra for at least 90 days post the demerger.Valterra will also debut on the London Stock Exchange as it seeks to minimise the impact of a potential share flowback – a function of selling by passive funds not mandated to hold the platinum firm’s shares, estimated by UBS to be $235m in outflow.Miller said despite initial bumps, Anglo American shareholders he’d spoken to supported Valterra’s investment case. “The ones I’ve spoken to, about 90% of Anglo’s shareholders, intend to hold Valterra,” he said. “They see the asset base. They like how we’re thinking about capital and shareholder returns.”The company also faces a rocky first half to its 2025 financial year. A report by UBS this month said Valterra Platinum would slide into net debt totalling R8.4bn as of end-June owing to demerger costs and a hit to production following heavy rains in February.“The first half of the year is going to be a slower production period for us,” said Miller. “We’ve had the flooding incident at Amandelbult which has weighed on the first half so it’s been challenging.”Valterra suspended production at Tumela mine, a section of Amandelbult in South Africa’s Limpopo province, on February 20 after flooding overwhelmed its pumping facilities. Miller said Tumela would be “running by the middle of the year”.He also forecast a strong response in the second half of Valterra’s financial year. “We’ll have a really good second half. We’ve had a reasonable first half, but it’s had its challenges”. In addition, there is growing conviction that the platinum price will continue to recover. Analysts say following the PGM industry’s Platinum Week in London this month that supply is expected to decline while jewellery and autocatalyst demand was firm.“Platinum prices are starting to find momentum after several years of deficits, with signs of improvement in both jewellery and autocatalyst demand,” said Morgan Stanley.Valterra is the preferred pick of several sell-side analysts including Nedbank Securities and UBS: “Amplats [Valterra] remains our top pick … as we believe its more mechanised, higher-margin portfolio should limit the downside risk … whilst still offering attractive leverage to a potential cyclical recovery,” said UBS analyst Steve Friedman.“Amplats remains one of the better long-term PGM investment cases, in our view. This is largely a function of its strong balance sheet … and quality assets, which are mostly positioned on the lower end of the cost curve,” said Arnold van Graan at Nedbank Securities.The post Valterra shares to be volatile amid “challenging” first half appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com