International Ferro Metals Expects First Full-Year ProfitFirat Kayakiran
International Ferro Metals Ltd., a ferrochrome producer in South Africa, expects to post its first annual profit after cutting output costs by more than 6 percent.
The company, which produces medium-quality chrome at its Lesedi and Sky Chrome mines, has reduced costs to 5.87 rand (56 U.S. cents) a pound from 6.25 rand to compete with low-cost Chinese producers, Chief Executive Officer Chris Jordaan said in an interview. Its fiscal year runs through next June.
“Our key focus in the medium term is to ensure that we remain cash-generative, continuously post profit, strengthen our balance sheet and therefore improve our share price,” Jordaan said in London. The company will continue to be profitable as long as there’s no “significant deterioration” in prices and the exchange rate doesn’t “strengthen significantly,” he said.
International Ferro Metals has slumped more than 80 percent in London trading since its August 2009 peak as a global economic slowdown eroded demand for ferroalloys, which are used in stainless steel to prevent corrosion. The Sydney-based company expects prices to recover as Chinese consumption grows.
“In China power and ore prices are rising and they push up the ferrochrome prices,” Jordaan said. “At this stage we don’t see any reason why the price should fall because the Chinese producers are at the bottom, they are barely surviving.”