Following a challenging year for the company, Aim-listed Merafe Resources has reported a 31% decrease in revenue to R5.84-billion, and a 72% decrease in headline earnings per share (HEPS) to 12.2c for the year ended December 31, 2025.

Merafe also reported a 79% decrease in basic earnings per share to 5.7c and no change in the final cash dividend of 8c a share.

The company noted a 3% decrease in net asset value to R4.72-billion and a 69% decrease in earnings before interest, taxation, depreciation and amortisation (Ebitda) to R533-million.

Net cash generated from operating activities decreased by 65% to R609-million, with a 19% decrease in cash and balances held with central treasury to R1.16-billion.

Merafe also reported a 63% decrease in ferrochrome production to 112 000 t.

During a financial results presentation on March 9, CEO Zanele Matlala explained that this was owing to all operating smelters having been idled from the second quarter of 2025.

Additionally, the company noted a 44% increase in chrome ore sales volumes to 683 000 t; a 10% increase in platinum group metals (PGM) sales volumes to 14 948 oz; and a 14% increase in ferrochrome production cost a ton.

In a Sens release, the company explained that profits declined significantly to R143-million mainly owing to lower ferrochrome sales and a stronger rand:dollar exchange rate.

During the presentation, FD Ditabe Chocho noted that capital expenditure for the year was R447-million, with R186-million used on smelting operations, R221-million spent on chrome ore mining operations and R40-million spent on PGM operations.

Meanwhile, Matlala explained that, following the completion of the business review process in April 2025, production was suspended at all operating smelters of the Glencore-Merafe Chrome Venture, leading to significantly lower production and higher standing charges.

The company noted that the ferrochrome industry in South Africa continues to face significant structural challenges, including high energy costs and increased competition from Chinese producers.

Additionally, Matlala noted that power supply during the period was mostly stable with minimal load curtailments experienced in 2025.

She noted, however, that high power costs remain a concern, which was a key contributor to smelters being suspended from the second quarter.

Matlala explained that the venture continues to engage with State-owned Eskom and other stakeholders to find sustainable solutions to high tariffs.

In February, which is post year-end, the National Energy Regulator of South Africa (Nersa) approved an interim tariff of 87.74c/kWh for 12 months while a lower tariff was being explored.

Matlala said a lower tariff is key to the restart of Wonderkop and Boshoek smelters.

She said this enabled the restart of the Lion smelter in mid-February, noting that the tariff was not sufficient or low enough for the company to restart Boshoek and Wonderkop smelters.

At the end of February, Matlala noted that Eskom proposed a tariff of 62c/kWh, which she described as a “welcome step”, adding that the venture was currently considering the conditions proposed by Eskom in terms of alternative energy.

“The venture has suspended the various renewable-energy projects to preserve cash,” she said, adding that Merafe was also in the process of derisking the Pele Green energy project.

Regarding the chrome management agreement with mining company Sibanye-Stillwater, Matlala explained that the Competition Commission approved the transaction in the fourth quarter of 2025, adding that the agreement was now effective.

She explained that the agreements would result in increased feed and improved recoveries, thereby optimising production yields and reducing operational costs across all relevant chrome recovery plants.

Merafe said its board of directors had resolved to declare a final cash dividend of R200-million, bringing the total dividends for the 2025 financial year to R300-million.

OUTLOOK

Merafe reiterated, in the release, that its smelting operations took strain in 2025.

Overall, in the medium to long term, the company noted that the viability of these operations depended on decisive and deliberate action to materially lower energy costs for smelters as well as sustained improvement in global ferrochrome/steel demand and prices.

While the future of the smelting operations remained uncertain, the company said the chrome ore business had done well in 2025, adding that the venture would continue to invest in this part of its business.

As in 2025, the company said it expected both the chrome ore and the PGM businesses to contribute positively towards its financial performance this year.

“We remain cautious in our approach to 2026 and will continue to focus on efficient operations, cash preservation, cost control and efficient capital allocation.

“We are dedicated to creating shared value for our stakeholders,” the company said.