Cape Town – Merafe Resources on Tuesday reported a 53 percent increase in headline earnings per share, from 13.9 cents to 21.2 cents, for the year to the end of December.It also hit an upbeat note about the ferrochrome market in the year ahead.
The company, which co-owns the Glencore-Merafe chrome venture with Glencore, reported record revenue of R5.7 billion during the period under review, up from R4.4 billion last time, on record production of 393 000 tonnes.
Merafe said ferrochrome revenue had increased by 25 percent year-on-year to R4.9 billion primarily as a result of an 18 percent increase in ferrochrome sales volumes and the 15 percent weaker average rand/dollar exchange rate, which was only partially offset by a 7 percent decline in net ferrochrome prices.
Profit for the year came in at R532 million, up from R343 million last time, and the company declared a final dividend of 4 cents per share.
Merafe added that sentiment for 2017 was positive.
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Towards the end of 2016, the European Benchmark ferrochrome price for the first quarter of 2017 was announced as US165c/lb, the highest quoted price since 2008.
The company added the price increase was indicative of a market still in deficit.
Stainless steel production is projected to increase by 3.5 percent in 2017 and 3.8 percent in 2018, the company said, indicating strong demand prospects for ferrochrome in the short-to-medium term.
“The venture is well positioned to take advantage of the increased demand ... We remain on track to achieving our strategy of further reducing Merafe debt and increasing dividends,” the company added.