African Rainbow Minerals (ARM), a South Africa-based diversified mining corporation led by billionaire businessman Patrice Motsepe, has reported a double-digit percentage drop in headline earnings in the first half of its 2022 fiscal year, owing to the group’s inability to generate higher revenue through its operations.
ARM is a major South African mining and minerals company, with interests in a broad range of mines, including iron, coal, copper, gold, platinum and other precious metals.
Motsepe founded the mining enterprise in 1997 as South Africa’s first Black-owned mining organization. Since then, ARM has grown to become a prominent player in the global mining industry.
According to its interim financial result, headline earnings, South Africa’s major profit indicator, fell by 27 percent for the six months ending Dec. 31, 2021, from 5.04 billion ($330 million) in 2021 to R3.7 billion ($242 million) in the first six months of its current fiscal year.
The decline in earnings can be linked to lower average iron ore and palladium prices, as well as the rand strengthening against the U.S. dollar, resulting in a sharp drop in revenue from R9.8 billion ($641 million) to R7.7 billion ($503.5 million).
Its iron ore division, ARM Ferrous, reported a 17-percent drop in headline earnings from R2.96 billion ($193.4 million) in the first half of 2021 to R2.43 billion ($158.8 million), while its precious metal division, ARM Platinum, reported a 38-percent drop in headline earnings from R2.02 billion ($132 million) to R1.25 billion ($81.7 million).
Despite a double-digit percentage drop in profits, assets associated with the South African miner rose from R47.5 billion ($3.1 billion) in 2020 to R54.2 billion ($3.54 billion), while shareholder funds increased from R38.3 billion ($2.5 billion) to R45 billion ($2.94 billion).
The company’s board of directors also authorized an interim dividend of R12 ($0.7835) per share for shareholders.
This is a 20-percent increase above the N10 ($0.6529 per share dividend paid to shareholders in 2021.
