Merafe Resources, Xstrata’s joint-venture partner in its South African ferro-chrome operations, will post an 84.5% fall in profits for 2009, it warned on Monday.
The company is expecting to report a loss per share of between 6 and 7 cents for the year ended December 31 compared with profits of 42 cents per share in 2008, it said, attributing the slide in profits to the rand-dollar exchange rate and lower ferrochrome prices.
Charge chrome contracts settled as low as 69 cents per lb in 2009 compared with all-time-highs of $2.05 per lb in 2008. Since the end of last year, the ferrochrome market has improved on resurgent Chinese demand.
Charge chrome contracts for the first quarter were settled at $1.01 per lb, while high-carbon ferro-chrome is trading at $0.95-1.05 per lb compared with $0.85-0.95 per lb at the end of December.
Despite the crippling market conditions in 2008, Merafe held 425 million rand ($56.2 million) in cash at the end of last year, it said. |