Tharisa proposes to reward shareholders with bumper dividend

THARISA Minerals, the Cyprus-headquartered platinum group metals (PGM) and chrome producer, has proposed a bumper final dividend for the year ended September after generating mega-profits as it rode the wave of strong metal prices.

Tharisa declared a final dividend of 3.5 US cents per share up by 367 percent compared to 75 US cents a share, equal to a payout ratio of 17.1 percent above the stated policy of an annual dividend at a minimum of 15 percent of consolidated net profit after tax.

The company did not declare an interim dividend due to the pandemic uncertainty amid hard lockdown.

Operating profit surged by 262 percent to $87.6 million (R1.34 billion) from $24.2m a year earlier, and the group generated a profit before tax of $75.8m compared with $11.2m a year earlier.

Tharisa said the engine of its business was the Tharisa open cast mine in the Bushveld Complex in South Africa.

Tharisa said it had positioned the group to benefit from an increasing PGM basket price contributing to the revenue increase of 18.4 percent to $406m and Ebitda rising by 119.8 percent to $113.4m, equating to earnings per share of US 16.2c per share, up 305 percent.

The PGM basket price rose 57.6 percent to $1 704 an ounce compared with $1 081 an ounce, helping the group to generate $406m revenue from $342.9m a year earlier, of which $218.6m was derived from the sales of PGM concentrate and $161.3m derived from the sale of chrome concentrates.

The strong PGM revenue on the back of a solid rhodium performance was driven by growing demand and an increasing deficit. Tharisa’s production of PGMs saw an improvement with 142 100 ounces versus 139 700 ounces a year earlier, and higher margin speciality grade chrome production of 321 600 tons compared with 312 100 tons the previous year.

The group raised concerns over government’s recent proposal to impose an export tax on chrome ores in a bid to support the ailing ferrochrome industry.

“A detailed third-party analysis has shown that any potential benefits, which rely on a multitude of factors occurring in parallel are far outweighed by the harm the primary and non-integrated chrome industry will suffer,” said Tharisa.

Tharisa shares declined 0.45 percent on the JSE yesterday to close at R17.70.