JSE-listed Merafe Resources achieved a profit of R512-million for the six months ended June 30, compared with a profit of R233-million for the six months ended June 30, 2025, on the back of significantly higher chrome ore sales volumes and an improvement in commodity prices.

Ferrochrome production decreased by 75% to 28 000 t from 112 000 t.

Despite challenging market conditions and a significant reduction in ferrochrome production, the group says its strong earnings growth highlights the resilience of its business model and the successful execution of its strategy to maximise value from its chrome operations.

Merafe declared an interim gross cash dividend of 16c apiece.

Revenue increased by 36% year-on-year to R3.43-billion.

Ferrochrome sales volumes decreased by 4% to 73 000 t, while chrome ore sales volumes increased by 75% to 380 000 t and platinum group metals (PGMs) sales volumes decreased by 4% to 6 800 oz.

Earnings before interest, taxes, depreciation and amortisation increased by 60% to R774-million, while headline earnings per share increased by 64% to 20.7c and basic earnings per share increased by 120% to 20.5c.

Net cash generated from operating activities increased considerably to R976-million, from R175-million net cash used in operating activities in the six months to June 30, 2025.

Meanwhile, net asset value increased 7% to R5.03-billion.

OUTLOOK
The outlook appears cautiously optimistic for the rest of the year, Merafe says.

The negotiated reduction in electricity tariffs and improved power supply from State-owned utility Eskom significantly lowers operational risks for smelters, enabling a rebound in production levels that had previously been curtailed, it points out.

However, margins may remain under pressure owing to increased ferrochrome supply from China and potential market oversupply, unless global stainless steel demand strengthens unexpectedly, the group cautions.

While chrome ore prices have stabilised, Merafe expects overall profitability to depend largely on how smelter throughput and ferrochrome pricing evolve throughout the second half of the year.