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Unaudited condensed consolidated financial statements and dividend declaration for the six months ended 30 June 2024
Merafe Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1987/003452/06)
JSE and A2X share code: MRF
ISIN: ZAE000060000
("Merafe" or the "Company")
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND CASH DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 30 JUNE 2024
2024 HALF YEAR IN REVIEW
1 fatality
(December 2023: 2 fatalities)
8% increase in TRIFR(1) to 2.52
(December 2023: 2.34)
17% decrease in ferrochrome production to 154kt
(June 2023: 185kt)
0.4% decrease in revenue to R4 744 million
(June 2023: R4 764 million)
27% decrease in EBITDA(2) to R1 131 million
(June 2023: R1 548 million)
Headline earnings per share of 28.2 cents
(June 2023: 42.0 cents)
Basic earnings per share of 28.8 cents
(June 2023: 42.0 cents)
3% increase in net asset value to R5 428 million
(December 2023: R5 259 million)
7% increase in net cash generated from operating activities to R852 million
(June 2023: R795 million)
4% increase in cash to R1 717 million
(December 2023: R1 656 million)
Interim cash dividend of 20 cents per share
(June 2023: 20 cents per share)
(1) Total recordable injury frequency rate.
(2) Earnings before interest, taxation, depreciation and amortisation.
CEO commentary on results
Merafe achieved a profit of R720 million for the six months ended 30 June 2024, as a result of higher realised chrome ore
prices and a weaker ZAR:USD exchange rate. Ferrochrome prices remain strained and cost increases continue to put
pressure on margins. The efficiency of our operations provided some buffer to protect our profitability.
The board of directors of Merafe ("Board") has declared an interim gross cash dividend of 20 cents (June 2023: 20 cents) per share.
Outlook
Our outlook has not changed much from year end. As articulated then, some key trends that are shaping the environment in which we operate are:
- Economic uncertainty that is characterised by high inflation, interest rates and trade tensions. This uncertainty makes it difficult for
businesses to plan and leads to volatility in the markets.
- The global market is increasingly focused on sustainability, and businesses are under pressure to reduce their environmental impact.
The Glencore-Merafe Chrome Venture ("Venture") has embraced this initiative and incorporated sustainability initiatives into strategic
plans. Our green energy initiatives are a key part of these plans.
- Technological innovation has a major impact on the global market, as new technologies are being developed that are changing the way we do
business. For the Venture, some of the key benefits of innovation are production efficiencies and the safety of our employees.
Our business is not immune to the impact of these trends which are firmly on management's radar.
Local challenges which include power shortages, energy costs and logistics constraints continue to be monitored by the Venture and mitigated in
the best ways possible.
We expect the second half of 2024 ("H2 2024") to be softer given a weaker market outlook. Downward pressure on chrome ore prices, which has started,
is expected to translate to lower ferrochrome prices. Given the forecast inflationary pressures, our margins are at risk of being squeezed in H2 2024.
Given the conclusion of the Negotiated Pricing Agreement with Eskom, the Venture plans on producing ferrochrome at most of its smelters.
The only smelters that will not be operational are Lydenburg, which is still on care and maintenance, and Rustenburg, which has been idle
since June 2023.
We remain cautious in our approach to the remaining six months of the year and will continue to focus on efficient operations, cash preservation,
cost control and efficient capital allocation.
We are committed to creating shared value for our stakeholders.
Further information
The announcement is the responsibility of the directors.
As the information in this announcement does not provide all of the details, any investment decisions should be based on the full results which
are available through the JSE cloudlink
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/MRF/Interim24.pdf
and on Merafe's website at
https://www.meraferesources.co.za/results/interims-2024/index.php.
Declaration of an ordinary cash dividend for the six months ended 30 June 2024
Notice is hereby given that, on 8 August 2024, the Board resolved to declare a gross interim cash dividend of 20 cents (June 2023: 20 cents)
per share to holders of ordinary shares.
The dividend will be paid out of income reserves.
The ordinary dividend will be subject to a local dividend tax rate of 20%. The net local ordinary dividend to those Merafe shareholders
("Shareholders") who are not exempt from paying dividend tax is therefore 16 cents per share. Merafe's income tax number is 9 550 008 602.
The number of ordinary shares issued at the declaration date is 2 499 126 870.
The important dates pertaining to the dividend are as follows:
2024
Last day for ordinary shares to trade cum ordinary dividend: Tuesday, 3 September
Ordinary shares commence trading ex-ordinary dividend: Wednesday, 4 September
Record date: Friday, 6 September
Payment date: Monday, 9 September
Shareholders will not be permitted to dematerialise or rematerialise their ordinary shares between Wednesday, 04 September 2024 and Friday,
06 September 2024, both days inclusive.
Sandton
12 August 2024
Sponsor
One Capital Sponsor Services Proprietary Limited
Executive Directors
Z Matlala (Chief Executive Officer)
D Chocho (Financial Director)
Non-executive Directors
S Phiri* (Chairperson), M Vuso*, K Tlale*, J Mclaughlan*, N Mabusela-Aikhuere*, D McGluwa, D Green
* Independent
Company Secretary
CorpStat Governance Services Proprietary Limited
Registered office
Building B, 2nd Floor, Ballyoaks Office Park,
35 Ballyclare Drive, Bryanston, 2191
Transfer secretaries
JSE Investor Services Proprietary Limited
Investor relations
Ditabe Chocho
Tel: +27 11 783 4780
Email: ditabe@meraferesources.co.za
Date: 12-08-2024 08:00:00
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