Merafe Resources (MRF) H2 2025 earnings summary

Executive summary

• 2025 saw deteriorated financial performance with revenue down 31% and significantly lower production due to suspension of smelters after a business review.

• No fatalities were reported and the injury frequency rate improved by 23%.

• Chrome ore production was marginally lower, while PGM production increased due to additional capacity and the PGMX plant.

• Global market uncertainty and tough operating conditions persisted, impacting demand and pricing.

• All smelting operations were suspended in H1 2025, leading to lower ferrochrome production and increased standing time.

Financial highlights

• Revenue declined by 31% year-over-year to R5,835 million, mainly due to a 63% drop in ferrochrome production and lower prices.

• Chrome ore revenue increased by 37% to R3,110 million, while PGM revenue rose 46% to R390 million on higher volumes and prices.

• Headline earnings per share fell to 0.122 (12.2 cents), with basic EPS at 0.057 (5.7 cents) due to additional impairment of smelting plants.

• EBITDA from the Venture dropped 66% compared to the prior year.

• Final dividend declared at ZAR 0.08 per share, totaling ZAR 200 million.

Outlook and guidance

• The global operating environment is expected to remain volatile in 2026 due to geopolitical tensions, protectionist policies, and macroeconomic risks.

• Stainless steel demand growth is forecasted, with China maintaining dominance in stainless steel and ferrochrome production.

• Steel production growth anticipated to support ferrochrome demand, but price and cost pressures will persist.

• Focus remains on cost management, cash preservation, and ESG initiatives; decisions on suspended smelters pending stakeholder engagement.

• Lion Smelter has resumed partial operations, with further restarts contingent on favorable electricity tariffs.