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Tharisa PLC: DEEP DIVE
OVERVIEW

Tharisa confident of delivery on 'Project 2020'

"A tough half but setting the platform to deliver into our second half guidance."
platinum
OVERVIEW: THS The Big Picture
Platinum and chrome are Tharisa's metals
 
  • Tharisa is a South Africa-based chrome and platinum miner

  • Guidance for 2019 is 150,000 oz of PGMs and 1.4mt chrome concentrates

  • Vision 2020’ strategy aims to deliver 200,000 ounces and 2mln tonnes.

 

How is it doing

Tharisa’s (LON:THS) first half of 2019 saw a 9.3% reduction in mining.

Correspondingly, there was a 12.2% drop in production volumes for platinum group metals (PGM) to 67,600 ounces while chrome output was down 16.2% to 614,100 tonnes.

Revenue for the first half amounted to US$166.5mln, down 16.4% from US$199.2mln in the comparative period of last year.

Pre-tax profit came in at US$10.2mln, marking a 72.6% reduction on the first half of 2018.

Tharisa said it will pay a dividend of 0.5 US cents per share in line with its target of 15% of net earnings.

 

What the boss says, Phoevos Pouroulis, chief executive

"Lower production was expected but we still managed to generate cash and profits before tax.
"A tough half but setting the platform to deliver into our second half guidance."

 

Video

Inflexion points

  • PGM prices have improved as palladium and rhodium picked up, chrome though has softened
  • Vision 2020 targets - 5.6mln tonnes of reef mined to produce 200,000 pgms and 2mln tonnes of chrome concentrate
  • Vulcan plant being technically assessed - last part of 2020 milestones
  • Exploration at Karo in Zimbabwe continues with 25,000m drilled
  • Intersected main sulphide zone with assay results being assayed

 

Blue sky 

In a note to clients, analysts at ‘house’ broker Peel Hunt said: “The Vision 2020 plans are on track with the Vulcan plant going for board approval this quarter (with likely first output in Q4 FY20E) and the phase 2 of the PGM recovery improvements coming through this financial year.

“We expect this to underpin an EBITDA increase from US$83m this financial year to over US$200m at steady state.”

Peel Hunt reiterated a ‘buy’ rating and 200p price target on Tharisa shares.

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