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  • The strategic focus of the Company, in the short to medium term, continues to be on safety, ferrochrome production, maximising cash flows and reducing costs.

    Chief Executive Officer’s strategic review
  • Merafe's results for the 2016 year were exceptional. Despite the significant market volatility coupled with challenges and cost pressures faced by the South African ferrochrome industry, Merafe delivered its second highest headline earnings in its history. It is my pleasure to take you through these results.

    Financial Director
  • I would like to thank the Merafe team and our partners Glencore for their hard work during the year, which again resulted in the Company producing an excellent financial and operational performance. The performance in the second half of 2016 was especially noteworthy.

    Chairperson’s report
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    2016 year in review          
                     
    Revenue
R5.7 billion
(2015: R4.4 billion)
Headline earnings of
21.2c per share
(2015: 13.9c)
     
Fatalities: 1(2015: nil fatalities)
 
TRIFR of 4.15 (2015: 4.17)
 
15.2% depreciation in the average Rand/US Dollar exchange rate
 
Total dividend for 2016 of
R120 million
(2015: R55 million)
 
    Successes
    Record production volumes
    Excellent financial performance
    Significant debt reduction

    Challenges
    Electricity pricing
    Commodity prices and demand
    Community issues
                 
    EBITDA of
R1.1 billion
(2015: R816 million)
Ferrochrome sales volumes of
R5.7 billion
(2015: 372kt)
     
                 
    Net profit of
R532 million
(2015: R343 million)
Ferrochrome production of
393kt
(2015: 377kt)
     
                 
    About the five
capitals model
    The five capitals model we have adopted provides a basis for understanding sustainability in terms of the economic concept of wealth creation or ‘capital’. A sustainable organisation will maintain and where possible enhance these stocks of capital assets, rather than deplete or degrade them. The model allows business to broaden its understanding of financial sustainability by allowing business to consider how wider environmental and social issues can affect long-term profitability.

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© Merafe Resources Limited - Integrated Annual Report 2016