Merafe Resources interim earnings down 61% due to lower prices
JOHANNESBURG - Mining company Merafe Resources on Monday reported a 61 percent decrease in headline earnings per share to 6.6 cents in the six months to June, mainly as a result of lower ferrochrome and chrome ore prices.
Merafe said its financial results were subdued in a challenging operational environment characterised by weak demand and lower realised prices, although this was offset by a weaker average rand/US dollar exchange rate and higher sales volumes.
"Working capital, in particular high stock volumes, continues to be a focus area for the company," the company said, adding that it was not declaring an interim dividend.
Merafe said it expected price and exchange rate volatility to continue, with global uncertainty remaining a concern and expected to continue having a negative impact on economies.
It said ferrochrome output decreased two percent to 206 kt during the period under review.
"Given the state of the market, there are likely to be ferrochrome production cuts across key markets. Surpluses are expected to narrow as a result with some improvement in prices expected," it said.
"In accordance with our strategy, we remain committed to maximising return to our shareholders in the near term in the form of dividends and will continue to assess opportunities to deliver shareholder value."
The company's earnings before interest, tax, depreciation and amortization for the six months to June fell 45 percent to R435 million, while revenue rose three percent to R2.789 billion.
- African News Agency (ANA)