African Rainbow Minerals (ARM) has declared an interim dividend of R14 per share as the diversified miner's headline earnings surged 40%, largely as a result of strong export coal prices.
Headline earnings increased to R5.17 billion in the six months ended in December 2022 - up from R3.69 billion in the comparative half in the previous year.
Earnings for the previous period included re-measurement losses of R346 million mainly related to the ARM Coal loans owed to Glencore which have since been settled.
Notably ARM Coal headline earnings surged to R1.4 billion, up from R351 million in the comparative half, mainly due to increased export thermal coal prices.
ARM Platinum headline earnings were 7% higher at R1.33 billion as both operations benefitted from the weaker rand and comparatively lower negative mark-to-market adjustments.
ARM Ferrous headline earnings were 4% higher at R2.52 billion as a 54% increase in headline earnings for the manganese division was largely offset by a 12% decline in headline earnings for the iron ore division. This was due to a lower US dollar prices for iron ore and a 15% decrease in export sales volumes and a 33% decline in local sales volumes.
The group's iron ore, manganese ore and thermal coal volumes were all negatively impacted by logistics challenges and unit production costs remained under pressure as a result of low volumes paired with above-inflation increases for diesel and explosives costs.
Still, ARM's financial position remains robust, with net cash of R9.54 billion at the end of December 2022.
ARM has now concluded the acquisition of Bokoni Mine from Anglo American Platinum and Atlatsa Resources Corporation, with R3.5 billion fully settled in cash on 1 September 2022.
"The acquisition represents a significant milestone and gives ARM access to Bokoni Mine’s large, high-grade resource and existing infrastructure. Bokoni Mine will enable ARM to scale its PGM [Platinum Group Metals] portfolio, improve global competitiveness and pursue further value-accretive organic growth."
The definitive feasibility study for the project is progressing on schedule and post the period end, the ARM board has approved bringing forward capital of R1 billion to enable the project to deliver early ounces.