17 Jul 2009 07:00
17 July 2009
International Ferro Metals Limited
("IFL" or the "Company")
Production Report for the three months to 30 June 2009
Highlights
Ferrochrome production restarted over the quarter
Production increased to 18,437 tonnes of ferrochrome, compared with 1,168 tonnes in the previous quarter ("Q3 2009"), but down when compared with 56,608 tonnes in the same period last year ("Q4 2008").
Ferrochrome sales volumes increased to 41,916 tonnes, compared with 10,484 tonnes in Q3 2009, but down when compared with 89,091 tonnes in Q4 2008.
Ferrochrome inventory was 9,362 tonnes as at 30 June 2009
Net cash balance ZAR340m as at 30 June 2009 (30 April 2009: ZAR374m)
| Q4 FY 2009 | Q4 FY 2008 | Q3 FY 2009 | |
| Tonnes | |||
| Ferrochrome production | 18,437 | 56,608 | 1,168 |
| Ferrochrome sales | 41,916 | 89,091 | 10,484 |
| Stock balances | 9,362 | 1,934 | 33,207 |
Commenting on the quarter, Chief Executive David Kovarsky said:
"The furnace restart in April to monetise our inventory went very smoothly and we are on track to achieving our production target for this three month campaign. We are encouraged by the perceived improvement in market conditions, specifically by the increase in ferrochrome demand and spot prices as a result of the Chinese stimulus programme. We will continue to monitor the market to assess global inventory levels, demand and pricing going forward. The combination of our healthy cash balance and recently upgraded facilities means that IFL can respond quickly to a sustained increase in demand."
Ferrochrome market update
Over the four weeks to 17 July, ferrochrome demand and spot prices have increased noticeably as a result of the Chinese stimulus programme combined with low ferrochrome inventories. Sales to China during the quarter outweighed sales to other markets but in the past few weeks the Company has experienced increased demand from Europe and, to a lesser extent, North America. The European settlement price for the quarter to September 2009 increased from US$0.69 to US$0.89 as a result of these factors and spot prices have firmed noticeably since the settlement date. According to CRU statistics, as at 30 June 2009 ferrochrome inventories were down to 13 weeks compared with 15 weeks at the end of March 2009. The Company believes that this, along with the increased Chinese demand mentioned above, should result in continued firmer demand at least for the short term.
Production & Inventory
Ferrochrome production for the three months ended June 2009 increased by 17,269 tonnes to 18,437 tonnes compared with the previous quarter and sales volumes for the quarter was up by 31,432 tonnes to 41,916 tonnes, compared with 10,484 tonnes in the previous quarter. This has resulted in a reduction of the stockpile to 9,362 tonnes as at 30 June 2009 in line with the Company's target of 10,000 tonnes.
Sales
Full year production and sales volumes for the year to 30 June 2009 ("FY 2009") amounted to 110,364 tonnes and 101,835 tonnes, respectively. This compares with production and sales volumes of 205,607 tonnes and 207,862 tonnes respectively for the previous financial year ("FY 2008").
Cost control
As a result of the 10% cut in salaries taken by all senior employees and board members, as announced on 31 March 2009, additional cost savings were realised in the quarter to 30 June 2009. The Company has also completed its redundancy programme and the restructuring of its use of contractors. The Company continues its focus on capital management and the reduction of operating costs.
For further information please visit www.ifml.com or contact:
International Ferro Metals Limited
David Kovarsky, Chief Executive Officer
Mob: +27 82 650 1192
Brunswick Group
Patrick Handley / Carole Cable
Tel: +44 (0) 20 7404 5959
Numis Securities Limited
John Harrison / Stuart Skinner
Tel: +44 (0) 20 7260 1000
About International Ferro Metals:
International Ferro Metals produces ferrochrome, the essential ingredient in stainless steel, from its integrated chromite mine and ferrochrome processing operations in South Africa. International Ferro Metals is listed on the London Stock Exchange under the symbol IFL.
Forward Looking Statements
This announcement contains certain forward looking statements which by their nature, contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.