Tharisa hit by lower sales, rising costs

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Tharisa hit by lower sales, rising costs

Published Date: 2019-05-13 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Tharisa hit by lower sales, rising costs

The platinum and chrome producer sold less metal at a lower price, while costs rose due to reduced economies of scale.

Tharisa Platinum has warned shareholders to expect a sharp drop in first-half earnings due to higher costs, lower sales and a material weakening in the price for chrome concentrate.

In a trading statement, the platinum and chrome producer said earnings and headline earnings per share for the six months to end-March were expected to come in at about 4 US cents, with a 10% swing either way. That's a 60% decline from the 10c per share it reported last year.

It blamed the decline on a 15.5% fall in the price of metallurgical chrome concentrate to $163 per tonne over the period, while the volume of chrome concentrate sold dropped by 14.8% to 618,000 tons. Sales volumes of platinum group metals (PGMs) fell 11.9% to 67,000 ounces. Lower mining volumes resulted in an increase in cash mining costs per tonne due to reduced economies of scale and it was also affected by an 18.1% rise in the rand price of diesel.

The company said operational improvements that started in the second quarter continued into the third quarter and it has maintained its full-year production guidance at 150,000 ounces of contained PGMs and 1.4 million tonnes of chrome concentrates. That's at the bottom end of guidance it gave in January, when it predicted between 150,000 and 160,000 ounces of PGMs and 1.4-1.5 million tonnes of chrome concentrates.

Its shares fell 3.5% to R20.48 on Friday.





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