African Rainbow Minerals (ARM), owned by Patrice Motsepe, reported a significant decline in profits for the 2023 financial year. This was attributed to lower production levels and weaker commodity prices.
- ARM’s revenue for the year ending on June 30, 2023, decreased from R18.41 billion in 2022 to R16.10 billion in 2023.
- The company’s profit also experienced a substantial decline, falling from R14.36 billion to R9.32 billion, representing a decrease of over 30%.
- Headline earnings for ARM decreased by 21% to R8.98 billion or R45.81 per share, compared to R11.34 billion or R57.87 per share in the previous financial year.
- The iron ore business of ARM was particularly affected by lower export sales and weaker prices, partly due to the depreciation of the rand against the US dollar.
- The company’s earnings from its platinum group metals division were also impacted by lower output and softer prices.
- ARM cited logistics challenges as another factor negatively affecting its volumes in iron ore, manganese ore, and thermal coal. Additionally, unit production costs were under pressure due to lower production volumes and increased costs of explosives, diesel, electricity, consumables, and maintenance.