Tharisa reports a tough interim period, but retains dividend

Tharisa, a producer of SA chrome and platinum group metals (PGMs), took a hefty knock to interim profit from lower chrome prices, but kept its dividend intact.

Tharisa, which is listed in Johannesburg and London, reported a fall in post-tax profit to $8.2m for the six months to end-March compared with a profit of $28m in the same period a year earlier.

Tharisa declared a 0.5 US cents per share interim dividend.

Revenue fell to $165m from $199m, which reflected the 15% drop in prices for metallurgical grade chrome concentrate prices to $163/ton. The PGM prices increased by nearly 12% to $1,017/oz during the period, with higher palladium and rhodium prices the key driver.

Chrome concentrate sales made up $94m of revenue, while sales of PGMs in concentrate to Impala Platinum and, to a lesser extent, Lonmin, contributed $58m. Tharisa generated nearly $15m from its trading and agency business which handles third-party material and logistics.

PGM sales fell 12% to 67,000oz, while metallurgical chrome sales dropped by more than 16% to 461,200 tons.

Of the chrome concentrate sales, a quarter comprised specialty grade chrome, which received a $50/ton premium, but sales fell by 9% to 156,800 tons during the period.

Tharisa milled tonnages fell by 10% to 2.3-million tons as it redesigned its open pit mining, supplemented by 100,000 tons of stockpiled material, which lowered recoveries at the two processing plants.

Tharisa noted interruptions to its processing operations from the stage 4 load-shedding by state power utility Eskom when 4,000MW were removed from the grid during February and March. It did not quantify its losses to these interruptions but said it had installed additional diesel generators.

Based on an expectation of a stronger second half to the year, Tharisa said the redesigned pit near Brits would deliver results in the next six months, allowing the company to retain its full-year production target of 150,000oz of PGMs and 1.4-million tons of chrome in concentrate, of which 350,000 tons would be specialty grade chrome.

seccombea@bdfm.co.za