African Rainbow Minerals (ARI) H1 2025 earnings summary

Executive summary

• Headline earnings for H1 F2025 declined 49% to R1.5 billion (R7.75/share), with an interim dividend of R4.50/share declared, reflecting a challenging environment of lower commodity prices, logistics constraints, and cost inflation.

• Net cash at 31 December 2024 was R6.1 billion, down from R7.2 billion at 30 June 2024.

• Safety performance deteriorated: LTIFR increased 33% to 0.32, with one fatality at Modikwa Mine.

• Capital expenditure reduced 51% to R2.14 billion, mainly due to lower spend at Two Rivers and Bokoni.

• The group remains committed to disciplined capital allocation, cost containment, and maintaining a robust balance sheet.

Financial highlights

• ARM Ferrous headline earnings fell 33% to R1.9 billion; ARM Platinum reported a headline loss of R689 million; ARM Coal headline earnings declined 11% to R182 million.

• Dividends received included R2.5 billion from Assmang and R70 million from Harmony; post-period, R462 million was received from ARM Coal.

• Segmental capital expenditure for the period was R2.14 billion, down 51% year-over-year, with most spent on ARM Platinum.

• Total borrowings increased by R1 billion to R2.1 billion, mainly due to Two Rivers Mine facilities.

• EBITDA margin for iron ore improved to 53% in H1 F2025; coal and manganese margins declined.

Outlook and guidance

• Management expects continued volatility in commodity prices and is focused on cost control, cash preservation, and optimizing capital allocation.

• CapEx guidance for 2025 is R4.1 billion, down R630 million from previous guidance, with non-critical projects deferred.

• Export iron ore volumes are forecast to decrease due to planned Transnet rail shutdowns, with recovery expected post-2027.

• Bokoni Mine expansion projects deferred; focus on cash preservation and right-sizing in response to weak PGM prices.

• ARM will not invest in new coal assets and will run existing mines to end of life.