Merafe Resources Shines: 11% Revenue Surge in H1 2023
Merafe Resources Limited (JSE: MRF, A2X: MRF) has announced its unaudited condensed consolidated financial results for the first half of 2023.
Operational Excellence
Despite a 9% decrease in ferrochrome production to 185kt, the company reported an 11% increase in revenue, reaching R4,764 million, up from R4,291 million in the same period last year. This growth was supported by higher realized chrome ore prices and a weaker ZAR:USD exchange rate.
Financial Success Amidst Challenges
Merafe’s CEO, Z Matlala, attributed the impressive financial performance to these favorable market conditions. Nevertheless, the company faced challenges, including lower ferrochrome prices and sales volumes, as well as increased costs of ferrochrome production. Despite these headwinds, Merafe managed to achieve a 13% increase in EBITDA, amounting to R1,548 million, compared to R1,373 million in June 2022.
The company’s commitment to operational efficiency and strategic capital allocation is reflected in the 22% increase in net asset value, which now stands at R5,054 million, showcasing its resilience in navigating market fluctuations.
Market Outlook and Navigating Challenges Ahead
Looking ahead, Merafe acknowledges the challenging economic environment characterized by rising inflation, interest rates, and trade tensions. The company is also keenly aware of the global shift towards a more sustainable economy and is taking steps to integrate green energy initiatives into its strategic plans. Technological innovation remains a key focus, driving efficiency and enhancing employee safety.
To manage costs during periods of elevated power prices, Merafe plans to produce ferrochrome exclusively at the Lion smelter, a strategic move to lower inventory levels and enhance cost management.
Key Financial Metrics for H1 2023
|
Metric
|
H1 2023
|
H1 2022
|
Change
|
|
Revenue (R million)
|
4,764
|
4,291
|
+11%
|
|
EBITDA (R million)
|
1,548
|
1,373
|
+13%
|
|
Headline Earnings per Share (cents)
|
42.0
|
37.0
|
+13.5%
|
|
Net Asset Value (R million)
|
5,054
|
4,145
|
+22%
|
|
Net Cash Flows from Operating Activities
|
795
|
748
|
+6%
|
|
Interim Dividend per Share (cents)
|
20.0
|
12.0
|
+66.7%
|
