Merafe Resources (MRF) H1 2025 earnings summary

Executive summary

• Financial performance deteriorated with revenue down 47% year-over-year to R2,519 million, mainly from lower ferrochrome volumes and prices, and headline EPS declining to 12.6 cents.

• Smelter business review led to suspension of Boshoek and Wonderkop smelters, with Lion smelter suspended for maintenance.

• Chrome ore sales and PGM revenues partially offset ferrochrome declines; PGMs production and revenue increased.

• Improved safety performance with no fatalities and TRIFR down 35% to 1.50.

• Global market uncertainty persisted, with stainless steel and ferrochrome demand growing globally but South African production dropping.

Financial highlights

• Revenue declined 47% year-over-year to R2,519 million, with ferrochrome revenue down 60% to R1,359 million and chrome ore revenue down 17% to R1,004 million.

• Headline earnings per share fell 55% to 12.6 cents; basic EPS at 9.3 cents.

• EBITDA for H1 2025 was R500 million, down 56% from the prior year.

• Profit after tax was R233 million for the period.

• Interim dividend of 4 cents per share declared, totaling R100 million.

Outlook and guidance

• Market uncertainty and cost pressures expected to persist, with ongoing geopolitical and macroeconomic risks.

• Stainless steel and ferrochrome demand forecasted to grow 3-4% annually through 2029, with China maintaining dominance.

• Lion smelter to be brought back post-maintenance, timing dependent on inventory levels.

• Focus on cost reduction, cash preservation, and mining operations; decisions on suspended smelters pending stakeholder engagement.

• Cautiously optimistic medium- to long-term outlook due to policy support and regulatory changes.