DURBAN - JSE-listed diversified mining and minerals company African Rainbow Minerals (ARM) share price rose more than 12percent on the JSE on Friday after the group announced that it would pay a maiden dividend for the first time since listing in 2007.
The group released its interim results for the six months to end December last Friday. In the results the company reported a 15percent increase in profits to R1.95billion, improving on last year’s loss of R283million. The performance came at the back of a strong performance from its manganese division, ARM Coal, Modikwa platinum mine, and ARM Copper.
As a result the share price jumped to R119.18 a share, up from Thursday’s closing price of R105.80 a share. By the end of the day the stock closed at R114.60.
The Patrice Motsepe-led mining company, listed on the JSE in 2007, had in the past only paid dividends on an annual basis.
However this changed on Friday, as it declared a maiden interim dividend of 250cents a share.
“We are pleased to have declared a maiden interim dividend, and will continue to consider interim and annual dividends taking into account among other things our financial position, the outlook for our operations and commodity markets, capital expenditure and growth,” the group said.
In its annual results the group declared a dividend of 650c a share.
Going forward, ARM said it remained confident about its business, as US dollar commodity prices for most of the minerals produced by ARM have remained strong into the second half of financial 2018, the group said.
Another pleasing aspect for the group was the renewed engagement with all the stakeholders involved in mining in the country.
“Re-engagement between the government, the mining industry and other stakeholders on Mining Charter III is positive for the South African mining industry, and is contributing towards improved investor sentiment,” the group said.
ARM managed to reduce it debt to R1.1bn during the period, down from R3.5bn as compared to last year. The decline can be attributed to the disposal of the Lubambe copper mine in Zambia, which was sold towards the end of last year.
The loss-making mine, which ARM held a 40percent stake in, was eventually sold for $97m (R1.16bn).
During the period ARM also reported a jump in headline earnings per share to 1023c, up from 893c, while revenue increased to R5.02bn, up from R4.95bn as compared to last year.
ARM Ferrous headline earnings increased by 26percent to R1.77bn, while Modikwa improved from a headline loss of R54m to headline earnings of R36m.
Two Rivers’ headline earnings declined by 16percent to R173m and Nkomati mine reported reduced headline earnings on lower shipment hit sales volumes.
ARM Coal headline earnings came in at R160m, up from R99m.