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African Rainbow Minerals (ARM) has challenged the downward trend in the mining and commodities sector with an 8% increase in headline earnings.

“ARM’s headline earnings increased by 8% mainly as a result of improved performances at Nkomati Nickel mine, the platinum mines and Goedgevonden Coal mine. The dividend increased from R4.75 to R5.10 per share,” says Patrice Motsepe, Executive Chairman.

Headline earnings increased to R3.74 billion from R3.45 billion in 2012. The headline earnings per share were 1 735 cents compared to 1 615 cents in the previous year and ARM’s dividend increased to 510 cents per share from 475 cents per share.

There was a significant increase in ARM Platinum’s contribution to headline earnings from R60 million in 2012 to R572 million and ARM Coal increased its contribution from R52 million to R148 million, while ARM Ferrous contributed R3.2 billion.

The company also boasts increased sales volumes in nickel, Platinum Group Metals (PGM), iron ore, chrome ore, export coal and Eskom coal, from Goedgevonden Mine and reductions in unit costs for the Dwarsrivier mine, Nkomati mine and Goedgevonden mine.

Regrettably, however, the unrealised mark-to-market impairment of the Harmony investment negatively impacted the basic earnings of R1.6 billion by an exceptional net R2.0 billion after tax in terms of ARM’s accounting policy.

Nevertheless, ARM remains financially robust with consolidated net cash (excluding partner loans) of R2.7 billion compared to R2.3 billion) in 2012.

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