EPS up 310% and 350%. Profit after tax 317% and 358%. Debt repaid: R458 million. Remaining debt: R350 million, due to be repaid 31 December 2012. Cash Balances = R540 million. im not sure though when ferrochrome prices started their decline, but the next results im sure are gonna be less amazing than this due to the furnace shut down. Long term hold?
i deal with quite a few of the ferrochrome furnaces. some have completely halted production while many have cut furnaces and started retrenching and running on skeleton crew. most are sitting with a stockpile of chrome. in november i spoke to one furnace manager and he said that over a million tons of chrome was sitting on chinese waters and delayed entry into china. even though the market will to a u-turn at some point in the future, one needs to factor in time and costing with regards to the stockpiles that have to be moved b4 production will kickstart and prices start soaring again
yes venice, but how long will demand be down?? thats the question. I mean obviously, if you think about the platinum price for example, demand has decreased but is definately bound to increase again in the near future. Cant we say the same for ferrochrome? im sure this is all due to the negative global growth prospects, but the CORE demand for ferrochrome has not disappeared, or has it?
a good indication is when the steel price starts to pick up....as all steel is not for the top end of the market,probably a longer wait might be required as chrome is used in stainless steel manufacture
Think the important factor is steel consumption in the East. A lot of demand is generated internally in places like mainland China. I dont think demand will pick up much this year. Problably a slow start from 2010 if all doesnt really go south this year. I think when that happens Merafe is in an ideal position to capitalise. From an average share price of R3.50 the sales volumes have fallen by some 80% and the price of the metal has more than halved. The problem thus is the E in Pe. As long as there is low earnings the share price will problably be in the doldrums. Im holding on to my shares with a 5year view and suggest you do the same.
I also have a five year view, but i took notice of someone who posted a while ago that since the shut down of the furnaces the fundamentals have changed, which caused me to go back and reassess my position. I will still buy/hold my stock tho, funny how a few months ago, ppl were saying how this share could double in price in a few months, i wonder where and what those people are saying now lol ai anyway.