JOHANNESBURG (miningweekly.com) – Ferrochrome company Merafe is expecting a sharp rise in earnings for the six months to June 30.

Merafe shares in 20.5% of the earnings before interest, taxes, depreciation and amortisation of the Glencore-Merafe Chrome Venture, which has a total installed capacity of 2.3-million tonnes of ferrochrome a year.

The JSE-listed company said on Friday that its basic earnings per share and headline earnings per share were expected to be between 17.9c and 20.9c, compared with 2.3c for the corresponding period last year, primarily owing to higher ferrochrome and chrome ore prices.

Merafe’s attributable ferrochrome production from the Glencore-Merafe Chrome Venture for the six months to June 30 increased by 10% compared with the corresponding period last year, mainly because of more furnaces being operational period-on-period, coupled with pleasing furnace performances.

Attributable ferrochrome production of 216 000 t was produced in the half-year, up on the 196 000 t for the first half of last year.

The European benchmark ferrochrome price of 110c/lb for the current third quarter of this year is 28.6% lower than the second quarter’s 154c/lb.

Headed by CEO Zanele Matlala, Merafe had net cash of R122.4-million, compared with R263.3-million at the end of June last year, and net debt of R207.8-million, compared with R409.3-million last year.

The financial results are expected to be released on August 7.

The Merafe share price on Friday rose by 2.19% before noon to 140c a share.

In the 12 months to December 31 last year, Merafe reported record production, record revenue and a major jump in headline earnings, after production hit the 393 000 t mark, revenue lifted to R5.7-billion, headline earnings a share soared 53% to 21.2c, safety improved and the final 4c a share dividend amounted to a payout to shareholders of  R100.4-million.

Last year chrome ore revenue increased by 61% year-on-year to R778-million on a 38% increase in chrome ore sales volumes to 372 000 t.