Motsepe’s African Rainbow Minerals declares record dividend after dramatic turnaround
ARM’s 50% share in the Assmang iron and manganese business contributed handsomely to the company’s full-year results
African Rainbow Minerals (ARM) swung into a substantial profit for its 2017 financial year, prompting it to pay its highest ever dividend, of R6.50 per share.
ARM, which is chaired by billionaire Patrice Motsepe, reported a profit of R1.4bn for the year to end-June compared with a R757m loss the year before, with its 50% share in the Assmang iron and manganese business contributing handsomely to the company’s results.
ARM’s 650c dividend was up from 225c the year before.
The company’s net debt fell to R1.27bn from R4.24bn previously.
Since the end of its financial year in June, ARM has received a R1bn dividend payment from Assmang.
By the end of June, ARM held R1.488bn in cash, up from the R1.29bn it held a year earlier. This figure excludes the attributable cash held in ARM Ferrous, the holder of the 50% stake in Assmang of R3.17bn.
Headline earnings, which excluded one-off items and give a like-for-like comparison with the previous year, tripled to nearly R3.2bn from R1.05bn before.
The ferrous division, which includes the Assmang stake, posted headline earnings of R3.7bn, an increase of 157%, with a 45% increase in the dollar price of iron ore and a 93% hike in manganese ore prices buoying results.
The platinum division, which includes Nkomati Nickel, a mine facing a difficult three years, also turned in an improved performance, with headline earnings increasing by R360m.
The coal division swung to headline earnings of R82m after a loss of R297m the year before.
The copper division narrowed its headline loss to R203m from R361m previously, but underlined the decision to sell the copper business in Zambia.
ARM, like a large number of gold mining companies, has made a R330m provision to settle a silicosis and tuberculosis class action.
ARM’s basic earnings for the year of R1.43bn, compared with R1.199bn a year earlier, were constrained by a range of impairments, including R711m against Nkomati Nickel, R734m against the Modikwa platinum mine and R373m against the sale of the Dwarsrivier chrome operation to its Assmang partner Assore.
These impairments were all reported in the interim results.
By 9.35am, ARM had risen 2.13% to R114.39.