Merafe chief executive Zanele Matlala said yesterday that the board of directors had decided not to declare an interim dividend due to prevailing market conditions. “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,” Matlala said.
Merafe, whose revenue is primarily generated from the Glencore-Merafe Chrome Venture, has a dividend policy of 30percent of headline earnings.
It declared a R200million dividend in the corresponding period last year and a record full-year dividend payout of R351m from its cash reserves.
Matlala cautioned the environment had been tough as the company battled the 13percent slide in prices to $1.04 (R15.34) per pound ($/lb) for the third quarter from $1.20/lb for the second quarter - the lowest level since the third quarter of 2016. The low prices reflected a weakening global stainless steel price environment, which had been adversely impacted by high inventories. “Due to the challenging operational environment characterised by weak demand and lower realised prices, Merafe has produced a subdued set of financial results for the six months ended June 30, 2019,” Matlala said.