African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — H1 2005 Earnings Presentation
19 slides from African Rainbow Minerals's earnings presentation, 2005
Slide 1: Results for the half-year ended 31 December 2004
Results for the half-year ended 31 December 2004 GROWTH, GROWTH,GROWTH GROWTHand andMORE MOREGROWTH GROWTH
Slide 2: Disclaimer
Disclaimer Forward Looking Statements Certain statements in this presentation constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. Such forward looking statements involve known and unknow
Slide 3: Welcome
Welcome An exceptional half-year performance with strong cash flows driven by a significant increase in production, sales and commodity prices, with improved unit costs 3
Slide 4: Half-year highlights
Half-year highlights • Revenue increased by 54% from R1.6bn to R2.4bn • Profit from operations increased 400% from R125m to R626m • Headline earnings increased from a loss of R1m to a profit of R20m 4
Slide 5: Half-year highlights
Half-year highlights • Cash generated from operations higher by 278%, from R161m to R608m • Balance sheet strong with net gearing of 19% • Operations are cash flow positive and are profitable in existing exchange rate environment 5
Slide 6: Half-year highlights
Half-year highlights • Nickel joint venture announced with LionOre on Nkomati nickel mine and its large expansion project • Transaction valued at US$48,5m: world-class partnership • Both companies will use combined skills and experience to optimise project feasibility: will accelerate project • Will
Slide 7: Critical success factors
Critical success factors Our “We Do It Better” management style Operational has been introduced excellence SHAREHOLDER WEALTH ‘Brownfield’ expansions Activities within CREATION the five focused action New project areas are developments well-advanced Investor attractiveness Acquisitive growth 7
Slide 8: Mergers & acquisitions
Mergers & acquisitions • We are positioning for a year of corporate activity that is aligned to our growth strategy • ARM is well positioned, with a strong balance sheet, to participate in future empowerment transactions in the resource sector • Exciting opportunities being evaluated • South Africa
Slide 9: Project pipeline
Project pipeline Full production Nchwaning Nkomati (manganese) (nickel and PGMs) Dwarsrivier (chrome) Two Rivers (PGMs) 2005 2006 2007 2008 2009 Modikwa Bruce, King and Mokaning (PGMs) (iron ore) = US$32.3million = R200 million Size of circle indicates total capital expenditure on project • Solid pr
Slide 10: Operational and financial review
Operational and financial review 10
Slide 11: Commodity sales on the increase
Commodity sales on the increase Half-years ended 2004 2003 Manganese ore tons 767 986 662 867 Iron ore tons 2 540 595 2 493 824 Nickel* tons 2 272 2 440 Platinum (Modikwa only) ounces 60 000 57 700 * Lower due to one delayed shipment of concentrate to Canada 11
Slide 12: Assmang
ARM Ferrous Assmang • Excellent operational efficiencies and higher sales demand enabled improved production • Commodity prices strong: optimistic medium-term outlook • Half-year capex of R286m as significant capital program continues • Nchwaning manganese shaft has commenced production and ramping-
Slide 13: Segmental information
ARM Ferrous Segmental information Half-year to 31 December 2004 Iron ore Manganese Chrome TOTAL Revenue (Rm) 317 1 112 458 1 887 Contribution to Assmang headline 7 333 13 353 earnings (Rm) Half-year to 31 December 2003 Iron ore Manganese Chrome TOTAL Revenue (Rm) 298 633 402 1 333 Contribution to As
Slide 14: Modikwa
ARM Platinum Modikwa • Full production build-up on track for later this year • All mining faces for full production equipped and available • Change of management • Significant resources allocated to improve team productivity • External consultant has confirmed management analysis and action plan • R
Slide 15: Major PGM operation at Two Rivers
ARM Platinum Major PGM operation at Two Rivers • Current trial mining (+100kt) has confirmed all mining and geological assumptions – effectively moved project into ‘brownfield’ status • Planned at full production: 230 000oz PGMs a year (120 000oz of platinum) • Funding being finalised – capital expe
Slide 16: Nkomati nickel
ARM Platinum Nkomati nickel • Excellent six months: operating efficiencies improved • Average nickel grade unchanged at 1.94% • Despite more lower grade material being milled from the Main Mineralized Zone (MMZ) • MMZ ore extracted from pre-development areas being mined for expansion • Current mine
Slide 17: Financial highlights
Financial highlights • Headline earnings of R20m from a loss of R1m • Headline earnings per share of 10 cents (1 cents a share loss) • Cash generated from operations up significantly to R608m from R161m • Ferrous and nickel divisions delivered strong results • ARM’s interest in Harmony reduced to 16
Slide 18: Attributable profit from operations
Attributable profit from operations 342 284 141 110 97 28 0 nil (53) (39) (30) Platinum Nickel Ferrous Corporate Total (50% will be accounted for going forward) - half-year ended 31 December 2003 • Profitable at prevailing exchange rates • Benefited from diversification and commodity price cycle • M
Slide 19: Questions?
We Do It Better Operational excellence GROWTH SHAREHOLDER WEALTH ‘Brownfield’ expansions CREATION Questions? Activities within the five focused action areas are well-advanced New project developments GROWTH Investor attractiveness ..and more.. GROWTH Acquisitive growth 19
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