For the six months ended 30 June 2014, EPS are expected to be between 8.7 cents and 9.3 cents, compared to 1.3 cents for the previous period, an increase of between 569 per cent and 615 per cent.
Headline earnings per share are also set to grow from 3.8 cents to between 8.6 cents and 9.2 cents, an increase of between 126 per cent and 142 per cent.
(READ MORE: Merafe expects increase in basic earnings per share)
“The significant period on period increase in headline earnings was primarily attributable to the increase in ferrochrome production and sales volumes and the weakening of the Rand against the US Dollar,” said the South African mining company, [DATA MRF:Merafe Resources Limited], in a statement.
The company added that it expects to close with a net cash balance of 19 million rand at 30 June 2014.
Merafe’s operating capacity utilisation was 90 per cent, an increase of 16 per cent period on period while ferrochrome sales volumes also grew by 25 per cent period on period.
“This increase was primarily attributable to a stronger market and the impact of the Eskom buy-back agreements that were entered into in the first half of 2013 and were non-recurring in the first half of this year,” continued the statement.
Strike action in South Africa’s platinum industry resulted in reduced UG2 production and higher chrome ore input costs at the Venture’s furnaces during the period, which resulted in a higher percentage of own mined ore and bought in ore used in the production of ferrochrome instead of internally produced UG2 concentrate.
Merafe added that ferrochrome production began at the second furnace of its Project Lion II on the 30 May 2014.
The group’s financial results for the period ended 30 June 2014 are set to be released on 12 August 2014.