Johannesburg - African Rainbow Minerals (ARM) said on Monday full-year earnings rose seven percent, but profit halved after it took a R2-billion hit on its investment in Harmony Gold.
The diversified South African miner said headline earnings per share for the 12 months to end June were 1,735 cents from 1,615 cents the previous year, beating the Thomson Reuters StarMine consensus of 1,627 cents.
Headline earnings are a important measure among South African analysts as they strip out exceptional and once-off items.
Profit came in 50 percent lower at R1.8-billion after the company wrote down the value of the original cost of the investment in Harmony.
The value of the investment, which is currently up for sale, has been adjusted after “a significant, prolonged decline in the market value below the cost of the investment”. The impairment is based on the Harmony share price of R35.75 per share at the end of June.
Increased sales volumes were achieved in nickel, platinum group metals, iron ore, chrome ore, export coal and coal supplied to Eskom.
ARM Platinum's contribution to headline earnings rose to R572-million from R60-million a year ago after a turnaround at Nkomati Mine and higher earnings at its Modikwa and Two Rivers operations.
“The impact on global commodity prices and currency volatility remained high during the past year particularly as a result of pronouncements out of the US and developments in China, and is not expected to abate in the short term,” the company said.
A dividend of 510 cents per share was declared, up from last year's 475 cents per share.
ARM's share price has risen almost 29 percent in the last 12 months, outperforming a 20 percent increase in the Johannesburg All-share Index. - Reuters