London, England — MININGREVIEW.COM — 19 May 2008 – International Ferro Metals (IFM) – an integrated ferrochrome producer listed on the London Stock Exchange and headquartered in Sydney – has achieved a strong financial and operating performance in the first quarter of 2008, despite the national power crisis and water problems.
An interim management statement and production report released here gave production of ferrochrome for the three months to 31 March 2008 as 52 422 tonnes, and for the nine months to the end of March as 145 739 tonnes.
Ferrochrome sales volumes for the quarter were 56 905 tonnes, and 118 771 tonnes for the nine months to 31 March 2008. Revenue for the respective periods was R456 million and R823 million.
Expansion costs to boost ferrochrome production had shot up by 30% to US$549 million (R4.15 billion), the statement continued, but added that the company would be able to pay that without borrowing to do so.
The majority of revenue for the quarter ended 31 March 2008 represented sales contracts entered into during the last quarter of 2007. At that time, the market price for ferrochrome was US$1.00 per pound, but rose to US$1.21per pound on 1 January 2008, with a further 60% increase to US$1.92 per pound from April 2008.
The statement explained that electricity supply constraints had accounted for a 13% loss in production of 8 677 tonnes, while a one-off interruption of water supply from the local municipality caused by the disconnection of that council’s electricity supply resulted in a production loss of 2 200 tonnes.
Production for the three months ending 30 June 2008 is expected to be 58 000 tonnes, which would bring total production for the 2008 financial year to approximately 204 000 tonnes, which is well below annual capacity of 267 000 tonnes.
IFL chief executive officer Stephen Turner, commented: “We are pleased to report the company has been trading profitably over the period and is generating strong cash flows. Our expansion plans give us a solid platform to grow capacity and to take advantage of the strong ferrochrome demand.”