African Rainbow Minerals (ARM) reported a significant profit drop for the 2023 financial year due to lower production and weaker commodity prices.
ARM released its results for the year ended 30 June 2023 today, which showed a significant performance decline.
ARM’s revenue decreased from R18.41 billion in 2022 to R16.10 billion in 2023.
Profit for the year also declined significantly, falling from R14.36 billion to R9.32 billion – an over 30% decrease.
The company’s headline earnings decreased by 21% to R8.98 billion or R45.81 per share, compared to R11.34 billion or R57.87 per share in FY 2022.
ARM said its iron ore business was affected by lower export sales and weaker prices, partly due to the rand weakening against the US dollar.
Lower output and softer prices also impacted the company’s earnings from its platinum group metals division.
The company said logistics challenges negatively impacted iron ore, manganese ore and thermal coal volumes.
It also said unit production costs remained under pressure due to lower production volumes and above-inflation increases in the costs of explosives, diesel, electricity, consumables, and maintenance.
However, the company said its financial position remained robust, with net cash of R9.78 billion on 30 June 2023 (30 June 2022: R11.18 billion).
ARM declared a final dividend of R12.00 per share for the period, a decrease from the R20 it paid shareholders in FY2022.