London-listed International Ferro Metals (IFM) returned to profitability in the financial year ended June 30, posting record sales of 222 320 tonnes for the full year ended 30 June 2014, the company announced on Monday.

IFM’s strong turnaround in profitability was marked by a R41 million profit before tax juxtaposed against a R126 million in the prior year.

Cost initiatives

The company’s focus on cost control and developing new lower cost initiatives have been fruitful – optimising the prices received through directing sales to specific regions, explained IFM CEO Chris Jordaan.

“I am pleased with this year’s strong operational and financial performance; we have shown International Ferro Metals can successfully respond to operational and broader market challenges,” he said.

“IFL remains focussed on remaining in the lowest part of the international cost curve in order to compete favourably with Chinese FeCr producers, and diversify its products and customer base which we believe will ensure sustained profitability of the business.”

Record full-year production

In addition, IFM posted record full-year production of 228 260 tonnes, which was up 24% on the prior year and 13% up on the previous record.

IFM also announced that the company’s net borrowings decreased to R338 million at year end from R362 million at 30 June 2013.

Earnings per share jumped to 7.9 cents for the year under review, compared with a loss of 23 cents a share in the year to June 2013.

Earnings before interest, taxes, depreciation and amortisation increased from R26-million last year to R202-million in the year under review.

Important turnaround

“This year marked an important turnaround for the company as it returned to profitability, despite depressed ferrochrome prices,” said Jordaan in a statement.

Despite the strike action in the platinum sector earlier this year and a lack of upper group two supply from Anglo American Platinum between February and June 2014, IFM achieved record ferrochrome production and sales for the year.

The company’s strategy of positioning itself lower on the global cost curve allowed it to ‘compete effectively’ with international suppliers, including China.

The company did not declare a dividend for the financial year.

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