Africazine:
Merafe Resources faces significant production challenges amid a steep decline in ferrochrome output.
The company reported a ferrochrome production of 28,000 t for the six months ended June 30, marking a 75% decrease year-on-year. This decline is attributed to the suspension of production at key smelters, including Wonderkop and Boshoek, along with partial suspension at the Lion smelter.
Merafe Resources Reports Major Production Declines
Merafe Resources has disclosed a sharp drop in its ferrochrome production, which fell to 28,000 t. This significant reduction is primarily due to operational suspensions at several smelters within the Glencore Merafe Chrome Venture. The company’s attributable chrome ore production also saw a slight decrease, totaling 425,000 t, down about 4% from the previous year.
Additionally, the production of platinum group metals (PGMs) concentrate decreased to 6,700 oz, reflecting a 5% drop compared to the prior period. The company attributes this decline to lower primary mine production and changes in feed mix.
South Africa: Key figures on ferrochrome production
- Ferrochrome production: 28,000 t
- Chrome ore production: 425,000 t
- PGMs concentrate production: 6,700 oz
- Basic earnings per share (EPS): between 19.5c and 21.4c
- Headline earnings per share (HEPS): between 19.5c and 22c
- Cash held by Merafe: about R871-million
- Merafe’s share of balances with Central Treasury: about R721-million
- Merafe’s share of 120-day notice deposit: R410-million
Financial Outlook and Earnings Expectations
Despite the production challenges, Merafe anticipates a significant increase in earnings per share. The expected EPS is projected to rise between 110% and 130% compared to the previous period, driven by higher commodity prices and increased volumes sold. Similarly, the company forecasts headline earnings per share to increase between 55% and 75%.
These financial results are expected to be released on or about August 11, providing further insights into the company’s performance amid operational hurdles.
Next Steps for Merafe Resources
- Release of financial results on or about August 11
Merafe Resources is navigating significant production declines while anticipating strong earnings growth.
