UPDATE: African Rainbow Minerals Sees Significant Growth in Headline Earnings

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Leading South African diversified mining and Minerals Company, last week releasedInterim Results for the six months ended 31 December 2016 showing significant increase in Headline earnings per share which rose 283 per cent to 893 cents compared to 233 cents in the corresponding period last year.

ARM stated that the Headline earnings increased by 234 per cent to R1 693 million largely due to excellent results in the ARM Ferrous division and the Two Rivers Platinum Mine (Two Rivers).

This equates to headline earnings per share of 893 cents (1H F2016: 233 cents) based on the weighted average number of shares of 189.53 million (1H F2016: 217.55 million).

ARM maintained that good cost containment was achieved at all mines except at Goedgevonden (GGV) and Nkomati mines where unit costs increased as a result of lower production.

Other critical positives for the company include a significant increase of US$ prices for the ARM suite of commodities during the last quarter of the reporting period; segmental capital expenditure also decreased by 15 per cent to R1 159 million (1H F2016: R1 368 million). Cash dividends received from the Assmang joint venture also climbed to R988 million (1H F2016: R500 million).

ARM noted that its financial position continues to be robust with a net debt to equity ratio of 15.4 per cent.

Basic loss per share improved from a basic loss of 458 cents reported in the previous comparable period to a basic loss of 134 cents. Sales for the reporting period were three per cent higher than the corresponding period in F2016 at R4 481 million (1H F2016: R4 332 million).

Sales for ARM Ferrous increased by 34 per cent to R6 088 million (1H F2016: R4 546 million). The average gross profit margin increased to 15 per cent (1H F2016: 5%).

ARM operational review

“There was an improvement in headline earnings in both the ARM Coal division and the Nkomati Nickel Mine (Nkomati) from losses incurred in the previous period.

“Headline loss for ARM Copper improved from R275 million to R178 million. Modikwa Platinum Mine (Modikwa) reported a headline loss of R54 million (1H F2016: R47 million loss),” the company said.

The company noted that these results have been achieved in conjunction with ARM’s partners at the various operations, Anglo American Platinum Limited (Anglo Platinum), Assore Limited (Assore), Impala Platinum Holdings Limited (Implats), Norilsk Nickel Africa (Pty) Ltd (Norilsk), Glencore South Africa (Glencore), Vale S.A. (Vale) and Zambian Consolidated Copper Mines Investment Holdings (ZCCM-IH).

ARM added that there has been no material change to its Mineral Resources and Reserves as disclosed in the Integrated Annual Report for the financial year ended 30 June 2016, other than depletion due to continued mining activities at the operations.

“Dwarsrivier Mine Mineral Resources and Reserves will however, no longer be reported by ARM following the completion of the disposal of ARM’s interest in Dwarsrivier mine to Assore in July 2016,”it said.

Editor’s note – An earlier report we published erroneously misrepresented the Result and decisions for the six months ended 31 December 2015 as Interim Results and outlook for the six months ended 31 December 2016.


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