Interim Financial Results for the half year to 31 December 2008

Interim Financial Results for the half year to 31 December 2008

23 February 2009

International Ferro Metals Limited (LSE: IFL), the integrated ferrochrome producer, presents its interim results for the half year ended 31 December 2008.

Highlights
    • Lower sales volumes and lower ferrochrome pricing resulted in
      • Revenue of ZAR526m for the December 2008 half, up 43% on the December 2007 half, but down 66% on the June 2008 half
      • Gross profit of ZAR69m for the December 2008 half, up 288% on the December 2007 half, and down 90% on the June 2008 half
      • Loss before tax of ZAR27m in the December 2008 half, slightly greater than the loss in the December 2007 half of ZAR24m but reversed from the June 2008 half profit
    • Achieved power-reduction adjusted nameplate production of an average of 20,339 tonnes per month in August and September 2008
    • Both furnaces switched off on 25 November 2008, all major capital projects deferred, excluding maintenance and upgrade spend and co-generation project
    • Rapid deterioration in the conventional industry-wide ferrochrome pricing mechanism led to material sales adjustments and write-down of inventories
    • Finished stock inventory of 42,523 tonnes as at 31 December 2008
    • No interim dividend to be paid

     

    Post period highlights
    • Management has successfully taken action to reduce ongoing fixed costs
    • Furnace maintenance and upgrade programme on track to complete by 31 March 2009
    • Furnaces expected to be available to restart production, depending on market conditions, from 1 April 2009. Full ramp-up possible within 4 weeks
    • Inventory level as at 31January 2009 was 33,338 tonnes
    • Market conditions appear to have begun to stabilise with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern
    • Price negotiations on outstanding shipments finalised
    • Outstanding receivable expected to be collected by mid-March 2009
     


    Six
    months to
    31
    December
    2008
    (ZAR’000)


    Six
    months to
    31
    December
    2007
    (ZAR’000)



    Six
    months to
    30 June
    2008
    (ZAR’000)    		 % Change
    between
    six
    months to
    31 Dec 2008
    & six
    months to
    30 June
    2008
    Sales revenue 526,057 367,525 1,551,871 (66%)
    Cost of goods sold (456,560) (349,595) (841,331) (46%)
    Gross profit 69,497 17,930 710,540 (90%)
    Net (loss) / profit before tax (26,809) (23,858) 654,217 (104%)
    Net profit / (loss) after tax 3,251 (23,858) 602,040 (99%)
    Profit / (loss) per share (ZAR cents) 0.81 (4.54)    
    Production volumes (tonnes) 90,759 93,317 112,290 (19%)
    Sales volumes (tonnes) 49,435 61,866 145,996 (66%)


    David Kovarsky, Chief Executive Officer of IFL commented:

    "The period under review has been overshadowed by extraordinary global events to which IFL has responded quickly and prudently. The Company has cut production, is controlling costs and conserving cash, but at the same time ensuring the operations are in good shape for the return of demand for ferrochrome. We have a world class facility with highly skilled operators and management team, and are confident we will get through the current economic crisis and resume our growth trajectory."

    There will be a presentation to analysts of the interim results on Monday 23 February 2009 at 8.30am (UK time) at 16 Lincoln’s Inn Fields, London WC2A 3ED. A recording of the presentation will be available on the website.

    For further information please visit www.ifml.com or contact:

    International Ferro Metals Limited
    David Kovarsky, Chief Executive Officer
    Mob: +27 82 650 1192

    Brunswick Group
    Patrick Handley / Carole Cable
    Tel: +44 (0) 20 7404 5959

    Numis Securities Limited
    John Harrison / Stuart Skinner
    Tel: +44 (0) 20 7260 1000

    View the complete report

    About International Ferro Metals:
    International Ferro Metals produces ferrochrome, the essential ingredient in stainless steel, from its integrated chromite mine and ferrochrome processing operations in South Africa. International Ferro Metals is listed on the London Stock Exchange under the symbol IFL.

    Forward Looking Statements
    This announcement contains certain forward looking statements which by their nature, contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.


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