23rd Jan 2014 10:09
LONDON (Alliance News) - International Ferro Metals Ltd Thursday said its ferrochrome production and sales volumes increased in its second quarter following operational improvements.
The ferro-chrome producer, with operations in South Africa, said its ferrochrome production is up 1.3% to 58,621 tonnes for the three months ended December 31, 2013, achieving a half-year record of 116,469 tonnes.
The company said its sales volumes increased to 57,394 tonnes for the quarter, an increase of 9.8% on the previous quarter, due to a range of operational developments.
"We've addressed all operational challenges and further improvement plans should continue to push production and sales volumes momentum," Chief Executive Officer Chris Jordaan told Alliance News.
The company has been carrying out a major cost saving initiative in previous years and announced in its first quarter production report that it had achieved 88% of its planned cost reductions. However, for the second quarter the company announced that its ferrochrome production cost for the quarter was ZAR6.46 per pound, up slightly from the previous quarter's ZAR6.43 per pound.
"We remain confident that we can achieve our targeted cost reductions by the end of the financial year, we just need to keep hammering at it," Jordaan said.
International Ferro Metals said its operations are cash generative and therefore it expects to be profitable for the quarter when its financial results are released on February 24.
The company's Lesedi underground mine remained out of production during the quarter as a review of the site's most effective strategy moving forward continued. International Ferro Metals said that the findings, which were previously expected in January, are now due at some point in this quarter.
"The outcome is imminent," Jordaan said. "The process is being reviewed, and we expect an announcement sooner in the quarter rather than later."
The company also noted that the European Benchmark Price for ferrochrome in the first quarter of calendar year 2014 increased 4.9% to USD1.18 per pound, and the South African rand continues to depreciate against the US dollar, both of which should help the company's finances.
Ferro-chrome is an alloy of chromium and iron and is used in the production of stainless steel, which relies on ferro-chrome for its appearance and to reduce corrosion.
International Ferro Metals shares were down 5.9% to 12.00 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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