Merafe Resources

CEO commentary on results

The COVID-19 pandemic has destabilised the global health systems and disrupted economies. This pandemic coupled with an already fragile operating environment have resulted in a loss after tax for the first half of 2020. A slow-down in global economic activity has contributed to not only reduced volumes of commodities sold, but also to lower realised cost, insurance and freight (CIF) ferrochrome and chrome ore prices. Merafe recorded a loss after tax for the period ended 30 June 2020 against a profit after tax in the prior comparative period. This includes a significant impairment loss on property, plant and equipment. A weaker average Rand:US$ exchange rate provided some cushion to the loss. Due to the Company's key focus areas, especially over these challenging times, being working capital management and cash preservation, no interim dividend has been declared. In spite of current challenges, the board of directors ("Board") remains positive about future prospects of the business supported by industry fundamentals that are still in place.