MERAFE Resources, the Johannesburg-listed ferrochrome producer that postponed its interim results until September whilst it absorbed the impact of impairment charges, said in a trading statement today it would report a basic loss per share of 37.6 to 39 cents.
Headline earnings would come in between 0.9 and 1.3 cents per share which compares to 6.6c/share in the comparative period of the previous financial year, a decline of up to 86%.
“The expected decrease in basic earnings and headline earnings per share is primarily driven by substantially lower chrome ore and ferrochrome prices and lower sales volumes which were partially offset by a weaker average Rand:US exchange rate,” it said. “In addition to this, basic earnings includes an impairment charge which has led to further expected decrease in basic earnings per share.”
The firm’s year-on-year net cash would fall about R90m to R263m from from R354m, the company said. It will present its interim numbers on September 8.
The company, which is in joint venture with Glencore, said in May that it would keep four smelters and its Kroondal mine in mothballs until market conditions improved.
“The decision to restart these operations will be kept under review and is subject to an improvement in the macro-economic environment, which was challenging even before the impact of Covid-19,” said Merafe at the time.
In January, Merafe started a Section 189 restructuring process at the Rustenburg smelter which produces at a capacity of 430,000 tons per year.