Tharisa PLC (TIHRF) Full Year 2024 Earnings Call Highlights: Operational Resilience Amidst Market Challenges

Tharisa PLC (TIHRF) showcases strong operational performance and strategic initiatives despite facing financial pressures and market volatility.

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Release Date: November 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Tharisa PLC (TIHRF, Financial) achieved a zero lost time injury rate, reinforcing their commitment to safety.
  • The company successfully negotiated a five-year cost of living adjustment agreement with the recognized union, ensuring workforce stability.
  • Record chrome production was achieved despite multiple challenges, demonstrating operational resilience.
  • Tharisa PLC (TIHRF) maintained a strong operational cash flow, highlighting the robustness of their business model.
  • The company upheld its dividend policy while growing its business, reflecting financial discipline and shareholder value focus.

Negative Points

  • Net profit after tax decreased by nearly 5% from the prior year, indicating some financial pressure.
  • PGM production was slightly lower than the previous year, affected by the quality and oxidative state of feed material.
  • The PGM basket price dropped by almost 28% from the prior year, impacting revenue from this segment.
  • The company faces challenges in securing debt for the Karo Platinum project due to current PGM commodity prices.
  • There is a noted decrease in chrome prices by 15% over recent weeks, which could affect future profitability.

Q & A Highlights

Q: Could you elaborate on the production outlook for 2024 and the potential to achieve the 2 million tonne target?
A: Our guidance on the low end is conservative, but we aim to exceed the 1.7 million tonnes achieved this year and work towards the 2 million tonne target. This depends on the quality of ore, head grades, and the oxidative state of the material. We are committed to achieving this within the next 24 months by optimizing mining, head grade, and processing capabilities. – CEO

Q: How does the current chrome price drop impact your business, and is there flexibility to prioritize chrome over PGMs?
A: The chrome price has dropped by about 15% recently, which is typical for this time of year due to seasonal factors. We see potential for recovery post-Chinese New Year. We have some flexibility to prioritize chrome over PGMs, but ultimately aim to process 100% fresh ore for maximum recovery. – CEO

Q: What is the status of the Karo Platinum project, and are there any pending government approvals?
A: We are fully permitted with all necessary licenses and environmental approvals in place. The project is ready to proceed once fully funded, with an estimated timeline of 15 months to first ore production. – CEO

Q: Can you discuss the potential for cash flow generation from the Karo Platinum project at current commodity prices?
A: The Karo Platinum project is cash generative at current prices, with all-in costs estimated at around $800 per ounce. The project has a long life with significant resource potential, and we are exploring various funding options to optimize capital structure. – CFO

Q: How much debt are you planning to refinance in the coming year, and is royalty financing an option?
A: We plan to refinance approximately $100 million, extending the debt profile. Royalty financing is a potential option, but it has tax implications in Zimbabwe. We are considering it alongside other funding solutions. – CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.