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Summarised consolidated financial statements and dividend declaration for the year ended 31 December 2019
Merafe Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1987/003452/06)
JSE share code: MRF
ISIN: ZAE000060000
("Merafe" or the "Company" or the "Group")
SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2019
Sponsor: One Capital Sponsor Services (Pty) Ltd
Executive Directors: Z Matlala (Chief Executive Officer), D Chocho (Financial Director)
Non-executive Directors: A Mngomezulu (Chairman)*, NB Majova*, M Vuso*, G Motau*, M Mosweu, S Blankfield,
J Mclaughlan*.
Company Secretary: CorpStat Governance Services (Pty) Ltd
Registered office: Building B, 2nd Floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191
Transfer secretaries: Link Market Services South Africa (Pty) Ltd
Investor relations: Ditabe Chocho Tel:+27 11 783 4780 / +27 83 462 3040
Email: ditabe@meraferesources.co.za
* Independent
CEO Commentary on results
With a challenging operational environment and uncertainty fuelled by year-long trade wars which have affected both
the global demand for and pricing of our products, Merafe has produced an underwhelming set of financial results for the
2019 financial year. Industry dynamics led to market supply exceeding demand and resulted in lower realised CIF
ferrochrome prices. The loss after tax is a deterioration from a profit in the prior year and arose mainly as a result of
low commodity prices, an impairment loss on property, plant and equipment, impairment of inventory and an increase in
standing charges. A total cash dividend of R100 million has been declared for the year ended 31 December 2019.
Outlook
Stainless steel production is expected to grow by 3,2% in 2020, however both chrome and ferrochrome prices are
expected to remain under pressure in the short term due to oversupply. The growth forecasted does not factor in the
possible impact of COVID-19 (Coronavirus) and load shedding which is expected to last for 18 to 24 months.
We will continue to manage factors within our control. Cost management, efficient and safe operations, cash
preservation and efficient capital allocation will continue to be management's key areas for 2020.
The financial position of our business which is ungeared at year end remains strong and we're of the view that this
positions us to withstand the difficult times ahead.
2019 year in review
Key features
- 4% decrease in revenue to R5 379 million
(2018: R5 606 million)
- 31% decrease in net asset value to R3 381 million
(2018: R4 893 million)
- Headline loss per share of 1.8 cents
(2018: headline earnings of 27.2 cents per share)
- Basic loss per share of 54.2 cents
(2018: earnings of 27.2 cents per share)
- Net cash of R354 million
(2018: R281¹ million)
- 72% decrease in total dividend to R100 million
(2018: R351 million)
¹ Net cash includes cash and cash equivalents and bank overdraft.
Further information
This short form announcement is the responsibility of the directors. It is only a summary of the information contained
in the full announcement and does not contain full or complete details.
While this report, in itself, is not audited, the audited consolidated annual financial statements from which the
summarised consolidated financial statements were derived have been audited by the Group's auditors, Deloitte & Touche.
Their unmodified audit report, including key audit matter relating to the impairment of the Group's net assets, along with
the audited consolidated annual financial statements are available for inspection at the Company's registered office and
also available on Merafe's website at http://www.meraferesources.co.za/stake-annual-results.php.
Any investment decisions by investors and/or shareholders should be based on the full announcement which is accessible
via the JSE link at https://senspdf.jse.co.za/documents/2020/JSE/ISSE/MRF/FY2019SENS.pdf and also available on Merafe's
website at http://www.meraferesources.co.za/results/annuals-2019/index.php
The full announcement is available for inspection at the registered offices of Merafe (Building B, Second Floor,
Ballyoaks office Park, 35 Ballyclare Drive, Bryanston) or our sponsor, One Capital (17 Fricker Road, Illovo).
Such inspection is available at no charge, Monday to Friday from 9:00am to 4:00pm.
Declaration of an ordinary dividend for the year ended 31 December 2019
Notice is hereby given that on 06 March 2020 the board of directors of Merafe declared a gross cash final ordinary
dividend of 4 cents per share to holders of ordinary shares. The dividend will be paid out of income reserves.
The ordinary dividend will be subject to a local dividend tax rate of 20%. The net ordinary dividend, to those
shareholders who are not exempt from paying dividend tax, is therefore 3.2 cents per share and 4 cents per share for
shareholders exempt from paying dividend tax.
Merafe's income tax number is 9550 008 602. The number of ordinary shares issued at the date of this announcement
is 2 510 704 248.
The important dates pertaining to the dividend are as follows:
Last day for ordinary shares to trade "cum" ordinary dividend: Tuesday, 24 March 2020
Ordinary shares commence trading ex-ordinary dividend: Wednesday, 25 March 2020
Record date: Friday, 27 March 2020
Payment date: Monday, 30 March 2020
Shares may not be dematerialised/rematerialised between Wednesday, 25 March 2020 and Friday, 27 March 2020, both days
inclusive.
Where applicable, in terms of instructions received by the Company from certificated shareholders, the payment of the
dividend will be made electronically to shareholders' bank accounts on payment date. In the absence of specific
mandates, cheques will be posted to shareholders. Shareholders who have dematerialised their shares will have their
accounts with their CSDP or broker credited on Monday, 30 March 2020.
Sandton
9 March 2020
Date: 09-03-2020 08:30:00
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