Merafe Resources, the junior empowerment partner in a chrome joint venture with Glencore, said on Monday that its earnings for the 12 months to end-December could be more than 20% higher than in the previous year.
It expects basic earnings per share (EPS) to increase by between 14% and 34% to up to 76c, compared with 56c in 2022.
Headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, is expected to improve by between 4% and 24%. This will place HEPS at between 58.7c and 70c compared with 56c in the previous period.
“The expected increase in EPS and HEPS is primarily driven by a weaker rand-dollar exchange rate, high chrome ore sales volumes and higher realised prices due to market dynamics,” Merafe said in a trading statement on Monday.
The company advised shareholders in October that the European benchmark ferrochrome price for the fourth quarter of 2023 was up 1.32% compared with the previous quarter. This was, however, after prices declined 12% in the third quarter.
Ferrochrome, which contributes about 80% to Merafe’s revenue, with the other 20% from chrome ore, is used in the production of stainless and other speciality steels.
It also expects some improvement in its cash balances for the year, noting that this would include cash set aside to fund future environmental rehabilitation obligations.
At midday, the share was up 14% at R1.46 on the JSE.
Merafe will publish its financial results on or before March 18.
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