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[Ferro-Alloys.com]Merafe Resources says basic earnings per share for the six months to June will drop by between 41% and 48% to 4.7c and 5.3c.
In addition, headline earnings per share - seen by analysts as a key indicator of performance - will decline by between 40% and 47% to come in at between 4.7c and 5.3c.
Merafe says in a statement to shareholders this drop off is mostly because of the decrease in net ferrochrome prices and an increase in expenses, which was partially offset by the increase in ferrochrome and chrome ore sales volumes and the weaker rand.
Despite the difficult period, the company has managed to pay down debt and will end the period with a net overdraft of R70 million compared with R162 million at the end of December.
Its total debt owing to Absa and Standard Bank has also declined to R609 million from R617 million.
During the interim period, its attributable ferrochrome production from its major asset, the Glencore Merafe Chrome Venture, increased 16% compared to a year ago.
This was due to the additional production from the Project Lion II furnaces which ramped up to full capacity in the second quarter of 2015.
The mine’s operating capacity use for the first half of the year was 92%.
Merafe notes its joint venture accounts for about 42% of the country’s total chrome ore and ferrochrome capacity of 4.8 million tons a year.
Glencore has chrome resources in excess of 100 years based on current smelting capacity.
Merafe is 29% held by Royal Bafokeng Resources.
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- [Editor:sunzhichao]
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