Merafe Resources' ferrochrome revenue decreased by 3% to about R6,8 million for the year ended 31 December 2022 compared to R7 million in the previous year primarily as a result of an 11% decrease in ferrochrome sales volumes to 350 000 tonnes.
This impact was cushioned by a 3% increase in average net cost, insurance and freight prices at 111 US cents per pound (lb) from the previous year’s 108 US c/lb as well as a weaker average South African Rand to US dollar exchange of R16.37, representing a 10% change from R14.78 in 2021.
It said chrome ore revenue increased by 0.4% year-on-year to R1 million, driven by similar factors as for ferrochrome.
Ferrochrome finished goods volumes of 109 000 tonnes compared to 76 000 tonnes on hand at year-end represent approximately three to four months of sales.
The closing inventory value increased to about R2,4 million.
The increase in the closing value of inventory was due to low chrome and ferrochrome volume sales due to softer market conditions.
Merafe said chrome ore sales volumes decreased by 32% to 265 000 tonnes from 390 000 tonnes in 2021 with this impact offset by a 36% average increase in sales prices for the year.
Platinum Group Metals' (PGMs) revenue increased to R100 million from R2.6 million in 2021.
Although the average basket price of PGMs decreased by 9% to $2 007/oz compared to 2 216 US$/oz in 2021, higher volumes sold of 3 055oz as well as a weaker average Rand to US dollar exchange rate more than made up for the revenue impact.
After accounting for corporate costs of R65 million, which include a cash-settled share-based payment expense of R13 million, Merafe achieved EBITDA of R2,1 million compared to the previous year’s R2,4 million.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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