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Slight earnings increase for ARM

Sep 03 2012 09:43

Johannesburg - South African diversified miner African Rainbow Minerals [JSE:ARM] posted a slight increase in full-year earnings on Monday, boosted by higher sales across most of its commodities, but said the outlook remained challenging.

ARM, which has interests in nickel, coal, platinum, iron ore, chrome and manganese, said headline earnings per share for the year to the end-June rose to R16.15, a 2% increase from R15.85.

Sales rose 18% to R17.53bn.

ARM said its Lubambe copper project in Zambia was progressing on time and within budget, with the commissioning of the plant expected by the end of the current financial year.

An expansion project to lift production at its Khumani iron ore mine in South Africa was completed ahead of schedule and below budget. 

Demand for commodities is expected to remain challenging in the year ahead on the back of a subdued global growth outlook, it said.

“Demand fundamentals in the platinum group metals, nickel and chrome markets are expected to remain subdued in the short term due to uncertainty in the developed markets and over supply,” ARM said, adding that the long-term outlook for those commodities was positive.

Outlook for its ferrous unit would depend on demand from top commodity consumer China.

ARM said it had a strong cash position and would continue to look at acquisition opportunities. The miner declared an annual dividend of 475 cents per share.

Shares in the company, which are down 14% so far this year, were down 1.14% at R145.33 by 07:08 GMT, compared with a 0.12% drop in the Top 40 - (Tradeable) [JSE:J200] blue-chip index.  

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