African Rainbow Minerals Limited (ARM) has issued a trading statement projecting a substantial decrease in earnings for the first half of the financial year 2024 (1H F2024). The mining company, listed on the Johannesburg Stock Exchange (JSE), foresees a decline in headline earnings and basic earnings by significant margins compared to the corresponding period in 2023.
| Financial Metric | 1H F2024 Expectation | 1H F2023 |
|---|---|---|
| Headline Earnings | Decrease of 40% – 50% | R5,172 million restated¹ |
| Basic Earnings | Decrease of 70% – 80% | R4,388 million restated¹ |
| Headline Earnings per Share | 1,319 cents – 1,583 cents | 2,639 cents restated¹ |
| Basic Earnings per Share | 448 cents – 671 cents | 2,239 cents restated¹ |
Factors Impacting Performance:
ARM attributes the projected decline in earnings to several key factors affecting the mining industry. A significant drop in average US Dollar 6E PGM (platinum group metals) basket prices, coupled with lower thermal coal prices, has notably impacted the company’s revenue stream. These declines were partially mitigated by a weaker average rand/US Dollar exchange rate and higher average realized export iron ore prices.
Impairments:
The company’s basic earnings for 1H F2024 are further affected by impairments of property, plant, and equipment across various operations. After tax, on an attributable basis, the impairments include:
Financial Reporting:
The financial information forming the basis of this trading statement has not been reviewed or reported on by ARM’s external auditors. The company is scheduled to release its 1H F2024 financial results on 8 March 2024.
Conclusion:
The projected earnings decline for the first half of the financial year 2024 underscores the challenges faced by ARM amidst fluctuating commodity prices and economic uncertainties. The company remains focused on navigating these challenges while maintaining its commitment to shareholders and stakeholders.
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