African Rainbow Minerals (ARM), the company founded and chaired by billionaire Patrice Motsepe, expects headline earnings for its first half to rise as much as 44% thanks to record coal prices.
In terms of JSE listing requirements, a public company must alert the market as soon it becomes aware that its financial performance will improve or fall by at least 20% when compared to the previous matching period.
ARM mines and beneficiates iron ore, manganese ore, chrome ore, platinum group metals, nickel and coal and also has a strategic investment in gold through Harmony Gold.
While SA miners’ ability to export coal has been limited by train and port constraints, the rising price due to Europe’s energy crisis benefited ARM. Energy prices surged in 2022 thanks to underinvestment and Russia’s invasion of Ukraine.
Manganese, a mineral used in dry-cell batteries, and vital to the global energy transition, also rose and as a result, headline earnings are expected to increase by 34%-44% in the first-half to end-December to R4.9bn-R5.3bn. However, earnings will be lower due to impairments, an accounting treatment that indicates the devaluation of an asset.
ARM is impairing property, plant and equipment at the Beeshoek Mine in the Northern Cape to R659m. There is an impairment of the value of property, plant and equipment at Cato Ridge Works, a manganese smelter of R28m and an impairment of the Investment in Sakura Ferroalloys of R149m, in Malaysia.
ARM expects to release its interim results on March 6.
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