Tharisa Plc Faces Headwinds: 2023 Financial Outlook Dips Amidst PGM Challenges and Strategic Shifts

  • Financial Decline: Tharisa plc anticipates a substantial decrease in earnings for 2023 due to lower PGM prices.
  • Karo Platinum Project: The timeline for the Karo Platinum project has been revised to align with funding availability.
  • Commitment Despite Challenges: Tharisa remains committed to its capital allocation strategy, including dividends, and the Karo Platinum development.
By Lethabo Ntsoane

Tharisa plc, a leading mining company listed on both the Johannesburg Stock Exchange (JSE) and the London Stock Exchange (LSE), has issued a trading statement today, revealing its expectations for the financial year ending on September 30, 2023. The company cites challenging market conditions, particularly in Platinum Group Metals (PGM) prices, as a key factor influencing the anticipated decline in performance.

Production Update Impact

The trading statement refers to a production update released on October 17, 2023, which highlighted lower prices for the PGM basket. While chrome concentrate prices showed an upward trend, the weakened PGM prices and volatile macroeconomic conditions prompted Tharisa to revise the timeline for the Karo Platinum project. The adjustment aims to enhance flexibility and align with funding availability.

Financial Projections

Tharisa projects a significant decrease in basic earnings per share (EPS) for the financial year ending September 30, 2023. On a fully diluted basis, the expected range is between US 27 cents and US 28 cents, indicating a decline of 47.9% to 49.8% compared to the previous year’s EPS of US 53.8 cents per share. Similarly, headline earnings per share (HEPS) is anticipated to be between US 27.5 cents and US 28.5 cents, reflecting a decrease of 30.7% to 33.1% relative to the previous year’s HEPS of US 41.1 cents per share.

Table 1: Financial Projections

MetricExpected RangePercentage Change (YoY)
Basic EPS (US cents)27 – 28-47.9% to -49.8%
Headline EPS (US cents)27.5 – 28.5-30.7% to -33.1%

Commitment to Strategy and Dividends

Despite the challenging economic climate, Tharisa plc remains steadfast in its commitment to the existing capital allocation strategy. This includes a dividend policy of distributing at least 15% of consolidated net profit after tax. Additionally, the company expresses dedication to the Karo Platinum development project.

Results Release and Financial Review

The financial information forming the basis of this trading statement has not undergone review by the company’s auditors. The official results are expected to be released on or about December 14, 2023. The company encourages stakeholders to await the audited figures for a comprehensive understanding of Tharisa’s financial performance.

Conclusion and Market Response

Tharisa plc acknowledges the challenges posed by the current economic environment and the impact on its financial results. The market will closely watch for the official results release in mid-December to gain deeper insights into the company’s performance. Tharisa remains committed to its long-term strategic goals and endeavors to navigate the evolving market conditions.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: Twitter: @NtsoaneLethabo