African Rainbow Minerals (ARI) H2 2024 earnings summary

Executive summary

• Headline earnings for FY2024 declined 43% to R5,080 million (R25.91/share), mainly due to lower PGM and coal prices, partially offset by a weaker rand and higher iron ore prices.

• Net cash position at 30 June 2024 was R7,197 million, down from R9,779 million a year earlier, reflecting increased borrowings and lower cash generation.

• Total dividend for FY2024 is R15.00/share (final: R9.00/share), down from R26.00/share in FY2023.

• Safety improved with a 19% reduction in injury frequency rates, though one fatality was reported at Bokoni Platinum Mine.

• ARM acquired 15% of Surge Copper Corp and placed the Two Rivers Merensky project on care and maintenance due to weak PGM prices.

Financial highlights

• Group headline earnings dropped to R5,080 million from R8,983 million year-over-year.

• Revenue decreased to R12,921 million from R16,097 million year-over-year.

• EBITDA declined to R1,049 million from R5,831 million.

• Net cash to equity ratio at 12.4% (down from 18.1% in FY2023).

• Capital expenditure for FY2024 at R4.7 billion, down from R7.2 billion in FY2023.

Outlook and guidance

• ARM expects continued pressure from subdued global growth, high borrowing costs, and weak commodity prices, especially for PGMs and thermal coal.

• Management will focus on cash preservation, cost-saving, and responsible capital allocation, with potential postponement of capex.

• Two Rivers Merensky Project placed on care and maintenance from July 2024; restart to be evaluated when market recovers.

• Solar PV projects progressing, with 100MW for ARM Platinum targeted by August 2025.

• Infrastructure, logistics, power, and water security remain key operational risks.