South African mining group ARM says H1 earnings hit by weak prices

by Reuters 0

South African mining group African Rainbow Minerals Ltd (ARM) said on Monday its first-half headline earnings fell by more than 50 per cent due to lower prices for its commodities such as iron ore and platinum.

(READ MORE: ARM platinum, ferrous improve group’s earnings)

The diversified company said in a statement that headline earnings per share fell 56 per cent to 473 cents a share from 1,084 cents in the previous year.

ARM said the softer dollar price was offset by a weaker rand compared to the greenback, which softened by 9.5 percent in the period. Mining companies sell their commodities in dollars while paying most costs in rand.

Headline earnings, the main measure of profit in South Africa, exclude certain one-time items.

Earnings in the ferrous division, which includes iron ore, manganese and chrome fell by about 60 percent to 833 million rand ($67 million) due to a lower prices. [DATA ARI:African Rainbow Minerals] said in February it sold its stake in a chrome mine to its partner Assmang.

The iron ore price nearly halved last year and last week hit a record low below $60 a tonne due to more oversupply concerns and growth worries in China.

“The current commodity environment presents opportunities for consolidation and ARM continues to assess value accretive mergers and acquisition opportunities,” ARM said.