International Ferro Metals Ltd said on Monday its interim pretax losses widened as prices for ferrochrome - an essential ingredient in stainless steel - declined, and that it has no plans to pay a dividend.
Pretax losses widened to 27 million South African rand ($2.64 million) from 24 million in the year-earlier period.
The South African company's production in the first quarter to September rose to a record before deteriorating market conditions forced it to power down its furnaces last November and focus on clearing inventory.
Market conditions appear to have begun to stabilise, with ferrochrome inventories declining and spot prices stabilising, although large chrome ore stockpiles are a concern, it said.
In January, the company said it was likely to post an interim loss due to a sharp fall in ferrochrome prices and that it anticipated full-year profit materially below market expectations.
Following the profit warning, the company is expected to post a loss of 220,000 rand for the year to end June, according to a consensus of analyst forecasts. It posted a pretax profit of 630,000 rand the year earlier.
IFM is also forecast to move to a loss per share of 2.6 pence after posting earnings per share of 7.8 pence the year earlier.
The company has deferred all major capital expenditure and is using the plant shutdown period to undertake a maintenance and upgrade programme that it said is on track for completion by March 31.
The furnaces are expected to be available for production from April 1, subject to market conditions, it said.
Ferrochrome prices have fallen around 60 percent since the June quarter of 2008.
(Reporting by Julie Crust; editing by John Stonestreet)
($1=10.211 South African Rand)
(c) Reuters 2009. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.