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Sylvania Platinum - Earnings upside with chrome JV kicker in Q425

Sylvania reported FY24 EPS of 2.7c against our expectation of 5.8c and down 85% on the prior year due to mainly a 35% lower PGM 4E basket price. In addition, the company suffered the effects of much lower platinum group metal (PGM) prices, a delayed recovery in production and elevated levels of expense. The results included more granularity on the Thaba joint venture (JV), including accounting treatment and the outlook to FY28. However, thanks to high chrome prices and a better understanding of the price that Sylvania will receive at mine gate, we have lifted our near-term JV forecasts. We have further incorporated management guidance around higher Sylvania Dump Operations (SDO) ZAR costs for FY25. We have cut our FY25 EPS forecast by 33.7% to 5.1c to allow for the higher costs but have increased our FY26 forecast by 6% to 10.7c, allowing for more aggressive chrome price assumptions and a normalisation of SDO costs. We forecast 8.9% EPS growth to 11.7c in FY27. We have cut our valuation by 5.7% to 105.8p/share due to ZAR appreciation, affecting US dollar cost forecasts.