The share price of JSE-listed Merafe Resources increased by more than 15% on the morning of March 4, after the company informed shareholders that it was likely to report higher earnings for the financial year ended December 31, 2023.
Merafe expects to report a 14% to 34% increase in basic earnings per share (EPS) to between 64.5c and 75.7c for the year, compared with EPS of 56.4c apiece for the prior comparative period.
It also expects headline earnings per share (HEPS) to increase by 4% to 24% to between 58.7c and 69.9c for the period under review, compared with HEPS of 56.4c in the prior year.
Merafe attributes the expected increase in EPS and HEPS primarily to a weaker rand:dollar exchange rate, higher chrome ore sales volumes and higher realised prices owing to market dynamics.
Cash and cash equivalents as at December 31 are expected to be R1.66-billion, compared with R1.6-billion as at June 30, 2023.
Cash and cash equivalents for the period under review comprised cash held by Merafe of R697-million and R959-million, which is its balance in the Glencore-Merafe chrome venture.
Included in the cash held by the venture is cash set aside to fund future environmental rehabilitation obligations, with Merafe’s share of this being R328-million.
Merafe expects to release its results for the period on or before March 18.