Merafe warns of lower full-year earnings
JOHANNESBURG (miningweekly.com) – Ferrochrome producer Merafe Resources on Thursday warned shareholders that its basic earnings a share for the year ended December 2012 would be lower than earnings a share for the previous year owing to an impairment loss.
The company expected its basic earnings a share for 2012 to be between 1.7c and 2c a share, compared with 4.7c a share the year before.
Headline earnings a share would be between 4.6c a share and 5.1c a share, compared with 6.4c a share in 2011.
Merafe noted that the impairment loss had arisen as a result of the Xstrata–Merafe Chrome Venture's sale of certain high-cost mining assets as part of its ongoing cost savings initiatives.
“The sale of these assets, if concluded, would not impact on Merafe's participation interest in the venture and the proceeds from such sale would accrue to the venture partners in accordance with their participation interests,” the producer said in a trading statement.
Meanwhile, ferrochrome production attributable to Merafe for the year was 8% lower at 242 000 t, compared with the 263 000 t produced the year before, primarily as a result of weak demand and participation in Eskom’s power buy-back programme.
The ferrochrome producer stated that the compensation received from Eskom for the electricity not consumed was adequate to cover the costs and lost profits on the associated volumes.
The company’s results would be released on March 5.
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