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MERAFE Resources’ share price fell 8.42% to 87c on Tuesday morning after the ferrochrome producer warned shareholders its interim earnings were expected to halve.
Merafe said in a trading statement it expects to report on August 1 that its basic and headline earnings for the six months to end-June were between 2c and 2.6c, a decrease of between 48% and 60% from the matching period’s 5c.
A 29% drop in the rand’s value against the dollar was not enough to offset a 23% drop in ferrochrome prices, the trading statement said.
Ferrochrome production from its joint-venture with Glencore was nearly flat at 196,000 tonnes.
Production volumes were managed across the first two quarters of the year through timing of furnace refurbishments to optimise stock levels, the trading statement said.
Merafe said its net cash balance had improved to R412m on June 30 from R310m on December 31.
It had reduced the debt owed to banks down to R480m from R560m over the six months.
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