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Tharisa stays on track despite logistical issues

Africa-focused PGMs and chrome concentrates producer Tharisa’s fiscal 2022 production guidance is on track, it said in a report for the six-months to 31 March, while it managed a 7% year on year increase in revenue and delivered on its order book amid ongoing logistical challenges.
Tharisa stays on track despite logistical issues Tharisa stays on track despite logistical issues Tharisa stays on track despite logistical issues Tharisa stays on track despite logistical issues Tharisa stays on track despite logistical issues

Tharisa's guidance on track amid logistical issues

The group's revenue for the six months rose to US$334 million while headline earnings fell 28% year on year to $42.1 million, or by 29% to 15.5 cents per share.

"The focus for the remainder of the financial year will be to maximise PGM and chrome production, while curtailing as best as possible above inflationary costs," Tharisa CEO Phoevos Pouroulis said.

"These are volatile times," he said, noting that the H1 performance came in light of "material increases" to diesel—one of the company's major input costs.

The group's PGM production for the half was 91,800 ounces, which is up 22% year on year. And chrome concentrates production rose 6% to 776,700 tonnes. This sees PGMs and chrome concentrates production on track for the FY2022 guidance ranges of 165,000-175,000oz and 1.75 million-1.85 million tonnes, respectively.

Tharisa's financial years start in October.

The company reported an average PGM basket price for the six months of $2,592/oz, which was down 8% year on year, and a metallurgical grade chrome concentrate contract price of $175/t CIF China, which was up 21%.

Despite the currently weaker PGMs prices—which are weighed down by inflation, rising interest rates, and concerns over economic slowdowns—the company said it remains positive for the long-term price outlook.

"Supply deficits are forecast for rhodium and palladium. Platinum supply currently remains in surplus, yet this is forecast to swing into a deficit within the next 24 months," the company said.

"The impact of the supply disruptions and therefore pricing, especially on palladium, as a consequence of the economic sanctions on Russia are still to be felt in the markets," it added.

On the chrome price front, Tharisa said that while prices have continued to surge with logistical constraints impacting supply, severe Covid-19 lockdowns and slowing economic growth in China could weigh on prices in the near term.

But, Tharisa noted, supply disruptions ex Ukraine and Russia, and possibly South Africa, could also impact the market.

"Although current supply/demand is in balance at this stage, it can turn into a slight deficit," it said.

Tharisa has proposed an interim dividend of 3 cents per share.

Tharisa's share price was quoted as GPX145 on May 27, having dropped 2% day on day.