The ARM Board of Directors (the Board) announces a 204% increase in headline earnings for the financial year ended 30 June 2017 (F2017) to ZAR3 196 million (F2016: ZAR1 051 million).
The significant increase was mainly as a result of higher US Dollar prices realised for all the commodities in ARM’s portfolio relative to the previous corresponding year.
During the financial year under review the Rand strengthened 6% against the US Dollar partially offsetting the positive impact of higher US Dollar commodity prices.
Dividend declared increased by 189% to 650 cents per share (F2016: 225 cents per share). This is the highest dividend to date and is ARM’s eleventh consecutive annual dividend.
ARM Ferrous headline earnings increased by 157% to ZAR3 709 million as iron ore, manganese ore and manganese alloy prices recovered.
The division was able to deliver into this improved price environment realising average US Dollar prices for export iron ore that were 45% better than F2016.
The average realised US Dollar price for export manganese ore was 93% higher than F2016.
ARM Platinum headline earnings improved by ZAR360 million as each operation in the division improved its contribution to earnings.
There was a significant turnaround at Nkomati Mine from a headline loss of ZAR244 million in F2016 to headline earnings of ZAR91 million in the year under review. Two Rivers Mine headline earnings were up 2% to ZAR325 million (F2016: R318 million) while Modikwa Mine reported a reduced headline loss of ZAR66 million (F2016: ZAR84 million).
ARM Coal headline earnings of ZAR82 million in F2017 are a significant turnaround from the headline loss of ZAR297 million reported in F2016. The improvement was mainly due to the PCB operations which contributed ZAR181 million headline earnings to ARM (F2016: ZAR210 million headline loss). The Goedgevonden (GGV) Mine continued to be loss-making as operational challenges negatively impacted on sales volumes and unit costs.
The ARM Copper headline loss was ZAR203 million (F2016: ZAR361 million). On 15 August 2017 ARM and Vale announced the disposal of their 80% interest in the Lubambe Mine which is discussed in further detail below. The Lubambe Mine is classified as a discontinuing operation for reporting purposes.
The Corporate and other headline loss was ZAR778 million (F2016: ZAR301 million headline earnings) and includes a provision of ZAR330 million for a possible settlement of the silicosis and tuberculosis class action claims and related costs.