Sibanye Stillwater (JSE:SSW) ROC %

: 10.98% (As of Jun. 2023)

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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Sibanye Stillwater's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was 10.98%.

As of today (2024-04-19), Sibanye Stillwater's WACC % is 16.03%. Sibanye Stillwater's ROC % is 13.02% (calculated using TTM income statement data). Sibanye Stillwater earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Sibanye Stillwater ROC % Historical Data

The historical data trend for Sibanye Stillwater's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Sibanye Stillwater Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

1.90

-2.82

36.82

39.48

19.20

Sibanye Stillwater Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROC %																51.08	28.58	23.63	15.21	10.98

Sibanye Stillwater ROC % Calculation

Sibanye Stillwater's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	32254 * ( 1 - 31.98% )	/	( (105071	+	123414)	/ 2 )
=	21939.1708	/	114242.5
=	19.20 %

where

	Invested Capital		(A: Dec. 2021 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	152994	-	17631	-	( 30292	-	max(0, 20541	-	64831	+	30292	))
=	105071

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	166631	-	17141	-	( 26076	-	max(0, 20219	-	60764	+	26076	))
=	123414

Sibanye Stillwater's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	19798 * ( 1 - 26.48% )	/	( (123414	+	141740)	/ 2 )
=	14555.4896	/	132577
=	10.98 %

where

	Invested Capital		(Q: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	166631	-	17141	-	( 26076	-	max(0, 20219	-	60764	+	26076	))
=	123414

	Invested Capital		(Q: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	180424	-	16525	-	( 22159	-	max(0, 18022	-	56652	+	22159	))
=	141740

Note: The Operating Income data used here is two times the semi-annual (Jun. 2023) data.

Sibanye Stillwater (JSE:SSW) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Sibanye Stillwater's WACC % is 16.03%. Sibanye Stillwater's ROC % is 13.02% (calculated using TTM income statement data). Sibanye Stillwater earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

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Sibanye Stillwater (JSE:SSW) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Sibanye Stillwater Ltd (JSE:SSW) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

SBYSF:USA SBSW:USA SBSW:Mexico S1BS34:Brazil

Address

Cnr 14th Avenue and Hendrik Potgieter Road, Bridgeview House, Building 11, Ground Floor, Lakeview Avenue, Constantia Office Park, Weltevreden Park, Roodepoort, GT, ZAF, 1709

Website

https://www.sibanyestillwater.com

Sibanye Stillwater Ltd is a South Africa-focused mining company. The Group currently owns and operates five underground and surface gold operations in South Africa: the Cooke, DRDGOLD, Driefontein, and Kloof operations in the West Witwatersrand region, and the Beatrix Operation in the southern Free State province. In addition to mining, the company owns and manages extraction and processing facilities at its operations, where gold-bearing ore is treated and beneficiated to produce gold dore. The gold dore is further refined at Rand Refinery into gold bars with a purity of at least 99.5% and is then sold on international markets. Sibanye holds a 44% interest in Rand Refinery, global refiners of gold, and the largest in Africa. Rand Refinery markets gold to customers around the world.

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