QUOTE: Merafe cuts dividend as costs erode profits

JOHANNESBURG - Merafe Resources has declared a final dividend of R0.13 per share, down from R0.22 in 2021, as earnings declined 12 per cent.

The ferrochrome producer reported a 12 per cent decline in earnings before interest, taxes, depreciation and amortisation to R2.14 billion, while headline earnings per share decreased to 56.4 cents – down from 67 cents in 2021.

Ferrochrome production of 384kt was largely flat, revenue of R7.93 billion was two per cent lower, while production cost per tonne rocketed 30 per cent.

Merafe said the Russia-Ukraine conflict contributed to the rise in global inflation and supply chain constraints, causing cost pressure to mount.

Despite the challenges, Merafe recorded profit after tax of R1.4 billion, driven by higher commodity prices and a weaker exchange rate.

Trading

The share price was up 1.5 per cent yesterday morning, trading at R1.35.

Jubilee Metals has reported a drop in interim earnings, with headline earnings per share halving to £0.13 (R2.94) per share for the six months ended in December, down from £0.32 (R7.23) reported in the comparative period.

The company, which recovers and processes platinum group metals (PGM), chrome and copper from tailings, reported interim revenue of £63.1 million, only slightly down from £63.3 million previously.

The PGM basket price was down 11 per cent during the period under review, although this was partially offset by PGM operational cost management and

“The secret of change is to focus all your enERGY NOT ON fiGHTING THE OLD BUT ON BUILDING THE NEW.” —Socrates production output. The realised copper price was down 28 per cent.

Operating expenses of £9.7 million decreased from £10.9 million in the comparative half while net cash flows from operating activities were £16.9 million (H1 FY2022: £2.3 million).

The group continued to investment in copper and cobalt expansions and spent £24.1 million in this aim during the interim period.

The Jubilee share price was 3.76 per cent lower yesterday morning, trading at R1.79.

Dividend

Western-Europe focused Lighthouse Properties has lifted its dividend for its 2022 year, benefitting as trading restrictions eased in the wake of the Covid-19 pandemic.

Lighthouse, valued at about R11 billion on the JSE, owns seven properties with a value of €633.8 million (R12.4 billion) at the end of December, including in Slovenia, France and Spain.

The company’s distribution per share rose 0.93 per cent to €32.50, saying it benefited from the defensive nature of its malls - which are dominant in their catchment areas - as customers returned to brick-and-mortar stores.

The landlord added it was also benefiting from structural changes in the market, given larger fashion brands were consolidating in to fewer, but larger, flagship stores, while value-fashion retailers have been gaining market share. Lighthouse’s shares were unchanged in morning trade yesterday at R6.25 on the JSE, having gained 2.68 per cent over the past six months, but having fallen by just over a quarter over the past year.