Int'l Ferro deep in the red

14th Sep 2009 07:12

Ferrochrome producer International Ferrochrome slid into a second half net deficit of R341m as a slump in demand and prices prompted severe production cutbacks.The cut back in production caused sales to fall from 207,862 tonnes last year to 101,835 tonnes this year, with a consequential deterioration in economies of scale, the firm said. Combined with price falls in the product, it produced a loss before tax of R456m for this financial year, compared with a profit before tax of R630m in the prior year. Revenue fell by 59% to R782m.The price of Ferrochrome fell to $0.69/lb in the last quarter of FY2009, down 64% the same time in 2008, though it has since recovered to $0.89/lb in first quarter of the current year.'We are confident that the recent resumption in demand and stronger ferrochrome prices are sustainable and IFL is back on track to take advantage of this with an improved cost base,' chief executive David Kovarsky said.