Interim Financial Results for the half year to 31 December 2009

23 February 2010

Highlights

Financial highlights

  • Sales volumes increased to 71kt, up 35% on the June 2009 half
  • Higher sales volumes but lower ferrochrome prices and a stronger Rand
    resulted in
    • Revenue of ZAR452m for the December 2009 half, down 14% on the December 2008 half, but up 77% on the June 2009 half
    • Loss before tax of ZAR145 million in the December 2009 half, an increase from the ZAR27 million loss in the December 2008 half but a significant improvement from the ZAR429 million loss in the June 2009 half
  • Net cash balance of ZAR248 million as at 31 December 2009
  • No interim dividend to be paid

 

Operational highlights
  • Production volumes increased by 4% to 95kt
  • Rand production costs in line with budget
  • Second furnace started up during August 2009 and both furnaces are now operating at Eskom constrained capacity
  • Ferrochrome inventory was 33kt as at 31 December 2009, reflecting management’s decision to increase inventory above normal levels
  • Electricity co-generation plant is on schedule and on budget for commissioning during the second half of calendar 2010

 

Post period highlights
  • Innovative UG2 chrome supply contract with Anglo Platinum for 15kt per month expected to reduce costs
  • Significantly improved ferrochrome market conditions
 



Six
months to
31
December
2009



Six
months to
31
December
2008




Six
months to
30 June
2009		 % Change
between
six
months to
31 Dec 2009
& six
months to
30 June
2009
  (ZAR’000) (ZAR’000) (ZAR’000)  
Sales revenue 451,917 526,057 255,517 77%
Cost of goods sold (509,055) (456,560) (412,417) 23%
Gross (loss) / profit (57,138) 69,497 (156,900) -64%
Loss before tax (144,842) (26,809) (428,970) -66%
Net (loss) / profit after tax (105,093) 3,251 (341,830) -69%
(Loss) / profit per share (ZAR cents) (19.08) 0.81  

 

Production volumes (tonnes) 94,715 90,759 19,605 383%

Sales volumes (tonnes)

 70,936 49,435 52,400 35%

David Kovarsky, Chief Executive Officer of IFL commented:

"With both our furnaces operating at full capacity for most of the half year under review, we were able to increase sales volumes by 35% albeit at a lower ferrochrome price and in a stronger Rand environment. Our Rand denominated costs have now stabilised and we are continuing to manage our inventory and look for further opportunities to increase our margins and production volumes. The announcement of our UG2 chrome supply contract with Anglo Platinum last week illustrates the innovation of the management team and our focus on finding opportunities to reduce costs. The cash on our balance sheet gives us the strength to take advantage of opportunities as they arise.”

There will be a presentation to analysts of the interim results today, Tuesday 23 February 2010 at 8.30am (UK time) at 16 Lincoln’s Inn Fields, London WC2A 3ED. The presentation slides and a recording of the presentation will be available on the Company’s 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
Carole Cable / Fiona Mulcahy
Tel: +44 (0) 20 7404 5959

Numis Securities Limited
John Harrison / James Black
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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