Tharisa Earnings Signal Strength Despite Dividend Cut, JSE: THA Share Price Rebounds Off Support Level
Despite a lower dividend and fluctuating production trends, Tharisa achieved a consistent set of full-year results that reassured investors.
Quick overview
- Tharisa reported annual earnings of $603 million in revenue and $117 million in profit, despite a 33% cut in dividends.
- The company is entering a major growth phase with new underground infrastructure development at its Tharisa Mine and a large-scale PGM project in Zimbabwe.
- Despite mixed production trends, Tharisa's share price rose 2.33% following the earnings report, reflecting investor confidence.
- The firm maintains a significant position in the global chrome market, supplying about 10% of annual demand in key regions.
Despite a lower dividend and fluctuating production trends, Tharisa achieved a consistent set of full-year results that reassured investors.
Tharisa Reports Earnings Amid Dividend Cut
Tharisa, the Johannesburg-listed chrome and platinum-group metals producer, released its annual earnings on Monday, showing continued operational progress even as the board trimmed its dividend. The market took the update in stride, sending the share price higher on the day.
The company reported US$603 million in revenue and $117 million in profit, reflecting the impact of volatile commodity markets. Although chrome and PGM output dipped, improved pricing—particularly across the PGM basket—helped bolster profitability and soften the blow from production constraints.
Expansion Plans Drive Long-Term Optimism
Alongside is financial results, Tharisa highlighted a major new growth phase. The company has begun developing underground infrastructure at its flagship Tharisa Mine and continues to advance a large-scale PGM project in Zimbabwe. CEO Phoevos Pouroulis emphasized that these initiatives mark the beginning of a multi-year expansion strategy designed to lift volumes and extend the company’s reserve base.
Share Price Reaction and Technical Setup – The 20 SMA Held As Support
The stock rose 2.33% on Monday to close at R22, despite the reduced dividend. After retreating from September’s peak at R24.50 and finding support at the weekly 20-SMA near R20, the share price has resumed its upward momentum. Tharisa remains about 40% higher year-to-date, reinforcing confidence in the longer-term trend.
Tharisa Earnings Overview
Key Financial Highlights
Dividend Reduction:
- Tharisa cut its dividend by 33%, paying 3 US cents versus 4.5 US cents a year earlier, reflecting weaker production and softer market conditions.
Revenue & Profitability:
- Revenue slipped 16.4% to $602.9 million.
- Operating profit rose 5% to $125.6 million, while EBITDA increased 5.5% to $187.3 million.
- Headline earnings per share dipped 2.1% to 27.5 US cents.
Production Performance
Reef Mined:
- Output increased 17.4% to 5.4Mt, up from 4.6Mt.
PGM Output:
- Fell 4.7% to 138.3 koz from 145.1 koz.
Chrome Concentrate:
- Declined 8.2% to 1.56Mt from 1.7Mt previously.
PGM Market Strength:
- PGM revenue surged 24.2%, driven by an 18.6% increase in basket prices.
- Average PGM basket price: $1,615/oz, up from $1,362/oz.
Chrome Pricing Pressure:
- Chrome concentrate prices dropped 11% to $266/t.
Operational and Capital Expenditure
Production Base:
- Steady PGM output remains centered on the Tharisa Mine near Rustenburg, South Africa.
Capex:
- Total capital expenditure came in at $113.6 million, down from $195 million, reflecting disciplined investment and project prioritization.
Market Position
Tharisa continues to hold a meaningful foothold in the global chrome market, supplying roughly 10% of annual demand in China and Indonesia, and accounting for up to 15% of specialized chrome products.
Conclusion: While the dividend cut underscores ongoing margin pressure, Tharisa’s firm pricing environment, expanding project pipeline, and strong year-to-date performance signal a company positioning itself for sustainable growth. Investors appear increasingly confident that Tharisa’s strategic developments will support further upside into 2025.
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