African Rainbow’s Earnings Drop on Low Demand

1 September 2009 (Last Updated September 1st, 2009 18:30)

African Rainbow Minerals (ARM) said its headline earnings dropped 42% for the year ended 30 June, largely impacted by the global slowdown in the demand for resources. Despite the decline, ARM's executive chairman Patrice Motsepe said that the company is still in a good shape financiall

African Rainbow Minerals (ARM) said its headline earnings dropped 42% for the year ended 30 June, largely impacted by the global slowdown in the demand for resources.

Despite the decline, ARM's executive chairman Patrice Motsepe said that the company is still in a good shape financially.

“ARM is financially robust and continues to invest significant funds to grow the company despite the massive global economic crisis,” Motsepe said.

Headline earnings dropped to R2.3bn from R4.0bn in the previous year.

The firm's ferrous division was the key contributor to the headline earnings as its share increased by 14% to R3,150m from R2,775m in the previous year.

Profit from operations prior to exceptional items reduced 44% to R3.7bn from R6.7bn, while EBITDA reduced by R2.7bn to R4.5bn.

Platinum group metal sales and production rose 6% to 323,259oz and iron ore sales increased 13% to 7.4 million tonnes.