African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — African Rainbow Mnrls — FY2024 Earnings Presentation
42 slides from African Rainbow Minerals's earnings presentation, Sep 6, 2024
Slide 1: Condensed results for the financial year ended 30 June 2024
Condensed results for the financial year ended 30 June 2024 6 September 2024 We do it better
Slide 2: Executive chairman's statement on F2024 results
“ “Headline earnings for F2024 decreased by 43% to R5.1 billion (F2023: R9.0 billion), mainly due to the decline in the average US dollar 6E PGM basket price and the lower thermal coal prices. We declared a final dividend of R9.00 per share. Our financial position remains robust with net cash of R7.
Slide 3: Disclaimer
Disclaimer Throughout this presentation a range of financial and non-financial measures are used to assess the company’s performance, including, but not limited to financial measures that are not defined under International Financial Reporting Standards (IFRS). These adjusted financial measures are
Slide 4: Overview of results
Overview of results Dr Patrice Motsepe Executive chairman Modikwa Mine We do it better
Slide 5: Headline earnings
Headline earnings ARM Ferrous Group headline earnings (R million) 9% to R5.1 billion 43% (F2023: R5.5 billion) ARM Platinum 162% to 13 064 R910 million loss 11 338 (F2023: R1.5 billion earnings) 8 983 5 226 5 534 5 080 ARM Coal 4 814 75% to F2018 F2019 F2020 F2021 F2022 F2023* F2024 R391 million For
Slide 6: Dividends per share (cents)
Dividends per share (cents) Total dividend 1 200 3 000 3 200 2 600 1 500 Interim dividend per share 2 000 2 000 Final dividend per share 1 400 1 200 1 200 1 000 900 700 600 500 F2020 F2021 F2022 F2023 F2024 We are committed to paying dividends whilst pursuing quality growth and maintaining a robust
Slide 7: Dividends received
Dividends received Dividends received from Assmang Dividends received from ARM Coal R5 billion 29% to R422 million (F2023: R5 billion) (F2023: R598 million) Dividends received from Two Rivers Mine Dividends received from the investment in Harmony 100% to nil >100% to R166 million (F2023: R486 millio
Slide 8: Segmental EBITDA split by commodity (%)
Segmental EBITDA split by commodity (%) R million 11 009 24 321 17 839 13 994 8 920 1% 3% 3% 1% 4% 9% 7% 19% 4% 12% 8% 14% Other* 46% 39% Coal (GGV) 46% 44% 80% Manganese Iron Ore 46% 42% 37% 36% PGMs 5% (4%) (3%) F2020 F2021 F2022 F2023 F2024 Significant segmental EBITDA contribution from iron ore.
Slide 9: Safety and health
Safety and health Lost Time Injury Frequency Rate (LTIFR)* Total Recordable Injury Frequency Rate (TRIFR)** 19% to 0.22 19% to 0.50 (F2023: 0.27) (F2023: 0.62) * LTIFR per 200 000-man hours ** TRIFR includes the number of fatal injuries, number of lost time injuries and number of medical treatment c
Slide 10: Responsible environmental management
Responsible environmental management Carbon emissions (Scope 1 and 2 emissions) Progress on decarbonisation 5% to 1.69 MtCO2e* Solar photovoltaic (PV) power plant project is progressing inline with plan and (F2023: 1.78 MtCO2e*) is on target for the 100MW of electricity to *Million tonnes of carbon
Slide 11: Strategy: deliver competitive returns and create sustainable value
STRATEGY Owner-operator DELIVER COMPETITIVE RETURNS AND CREATE Entrepreneurial SUSTAINABLE VALUE management FOR ALL STAKEHOLDERS Operate Investing in Focus on our portfolio our employees value-enhancing of assets safely, and integrated responsibly and efficiently growth Partnering with Allocate capi
Slide 12: Operational review
Operational review Phillip Tobias Chief executive officer Khumani Two RiversMine Mine We do it better
Slide 13: Production by commodity (100% basis)
Production by commodity (100% basis) Unit F2024 F2023 % change ARM Ferrous Iron ore division 000t 14 100 13 900 2 Manganese ore 000t 3 600 4 300 (15) Manganese alloys 000t 382 425 (10) ARM Platinum Two Rivers Mine 6E PGM ounces 291 408 295 441 (1) Modikwa Mine 6E PGM ounces 289 751 285 910 1 Bokoni
Slide 14: Headline earnings/(loss) by division / operation
Headline earnings/(loss) by division / operation (R million) F2024 F2023* % change ARM Ferrous 5 058 5 528 (9) Iron ore division 4 933 4 158 19 Manganese division 143 1 372 (90) Consolidation adjustment and other (18) (2) >(200) ARM Platinum (910) 1 465 (162) Two Rivers Mine 168 1 262 (87) Modikwa M
Slide 15: Headline earnings variance analysis
Headline earnings variance analysis (R million) 10 000 43% 8 983 9 000 ( 470) 8 000 7 000 6 000 (2 375) 86 5 080 5 000 (1 144) 4 000 3 000 Increase Decrease 2 000 F2023 headline earnings Ferrous Platinum Coal Corporate F2024 headline earnings 15
Slide 16: EBITDA margins by commodity (%)
EBITDA margins by commodity (%) 18% Manganese alloys (22%) 29% Manganese ore 16% 42% PGMs* 13% 46% Coal (GGV) 29% 50% Iron ore 50% F2023 F2024 * Including Modikwa and Two Rivers mines only 16
Slide 17: ARM Ferrous
ARM Ferrous Khumani Mine We do it better
Slide 18: ARM Ferrous
ARM Ferrous Variance analysis – segment result (R million) Changes in average US dollar index prices (%) 10 000 4% 1 011 449 8 000 6 889 (369) 6 496 (1%) (1 036) (5%) 6 000 (448) 4 000 2 000 (28%) (28%) 0 High-carbon Medium-carbon Export 43.5% Export 36.5 % Export iron ore* F2023 ZAR:USD USD Prices
Slide 19: Iron ore (100% basis)
Iron ore (100% basis) Khumani Mine achieved 6 million fatality-free shifts over Operational performance approximately 9 years. % Beeshoek Mine achieved 16 months without lost time injuries, unit F2024 F2023 change the last lost time injury was in February 2023. Export sales volumes 000 tonnes 12 241
Slide 20: Manganese ore (100% basis)
Manganese ore (100% basis) Operational performance Black Rock Mine achieved 12 million fatality-free shifts over % approximately 15 years. unit F2024 F2023 change Export sales volumes 000 tonnes 3 684 3 589 3 Local sales volumes 000 tonnes 748 735 2 Change in unit cash costs % 20 5 Unit cash costs i
Slide 21: Manganese alloys (100% basis)
Manganese alloys (100% basis) Operational performance Average US dollar index price for High Carbon Ferromanganese % and Medium Carbon Ferromanganese decreased by 28% when unit F2024 F2023 change compared to the average price of F2023. Sales Volumes: South African operations 000 tonnes 81 97 (16) Sa
Slide 22: ARM Platinum
ARM Platinum Two Rivers Modikwa Mine Mine We do it better
Slide 23: ARM Platinum
ARM Platinum Variance analysis - segment result* (R million) Changes in unit cash costs** (%) 8 000 1 117 6 000 4 360 405 4 000 6% PGMs: Modikwa 2 000 14 (722) 105 574 (4 705) 17% PGMs: Two Rivers - F2023 ZAR:USD Mark-to- USD Volume Cash Non-cash F2024 market Prices costs costs adjustments Increase
Slide 24: PGMs (100% basis)
PGMs (100% basis) Operational performance The average rand per 6E kilogram basket price for Modikwa and unit F2024 F2023 % change Two Rivers Mines declined by 35% and 33% respectively. Two Rivers production volumes 6E PGM ounces 291 408 295 441 (1) Modikwa production volumes 6E PGM ounces 289 751 28
Slide 25: Nkomati Mine update
Nkomati Mine update ARM and Norilsk Nickel Africa Proprietary Limited (“NNAf”) concluded a Sale Agreement which provides for the acquisition by ARM of NNAf’s 50% participation interest in the Nkomati Mine for a cash consideration of R1 million (the Transaction). The Transaction is subject to certain
Slide 26: ARM Coal
ARM Coal Goedgevonden Mine We do it better
Slide 27: ARM Coal
ARM Coal Variance analysis – segment result (R million)* Changes in on-mine unit production costs (%) 1 400 133 1 200 1 052 1 000 Coal: PCB (1%) 800 600 178 420 400 Coal: GGV (4%) ( 71) ( 6) 200 ( 866) 0 (5%) (4%) (3%) (2%) (1%) 0% F2023 ZAR: USD USD Volume Costs Re-measure- F2024 Prices ment gains
Slide 28: GGV and PCB (100% basis)
GGV and PCB (100% basis) Operational performance The average realised thermal coal price (export US dollar) for % GGV and PCB decreased by 33% and 36% respectively. unit F2024 F2023 change Export sales volumes Mt 12.73 13.05 (2) Domestic sales volumes Mt 4.77 3.63 31 GGV on-mine saleable cost R/t 55
Slide 29: PGM projects status
PGM projects status Two Rivers Merensky Project A decision was made to put the project on care and maintenance from July 2024 driven by the current downward cycle in the PGM market. The Merensky concentrator plant construction and the first two mining levels have been completed. The future restart o
Slide 30: Investment in Surge Copper Corp
Investment in Surge Copper Corp ARM successfully acquired 15% of Surge Copper Corp (“Surge”) on 31 May 2024. Surge is a Canadian company that owns a large, contiguous mineral claim package that hosts multiple advanced porphyry deposits with pit- constrained NI 43-101 compliant resources of copper, m
Slide 31: Investment in Harmony Gold
Investment in Harmony Gold Copper is an important commodity, and ARM is seeking to grow and to acquire copper assets. ARM’s strategic investment in Harmony aligns with ARM’s copper objectives. Harmony is currently in a strong financial position, with a net cash balance that places them in a favourab
Slide 32: ARM's key focus areas
ARM’s key focus areas Ensuring that our operations are globally competitive and profitable. Maintaining a robust balance sheet. Aligning production capacity to logistics and infrastructure constraints. Exploring value-enhancing growth opportunities. 32
Slide 33: Capital allocation
Capital allocation Tsundzukani Mhlanga Finance director Black Rock Mine We do it better
Slide 34: Capital allocation guiding principles
Capital allocation guiding principles* Invest in growth of existing businesses Dividend payments Mergers and acquisitions Debt repayment Healthy gearing levels create a flexible platform for sustainable growth Share repurchases Underpinned by metrics that measure the sustainability of value creation
Slide 35: Cash flow analysis (R million)
Cash flow analysis* (R million) Investing in Interest existing business and debt Shareholder Sources of funds and acquisitions repayments returns Other 5 606 ( 600) 1 771 820 873 10 004 (6 292) ( 53) 8 309 (3 529) ( 76) ( 215) Increase Decrease Balance at Cash generated Dividends Taxation paid Capit
Slide 36: Net cash and debt (R million)
Net cash and debt (R million) 30 June 2024 30 June 2023 Cash and cash equivalents per statement of financial position* 8 326 10 021 Cash and cash equivalents per statement of cash flows** 8 309 10 004 Overdrafts 17 17 Total borrowings (1 129) (242) Long-term borrowings (631) (206) Short-term borrowi
Slide 37: Segmental capital expenditure (R million)
Segmental capital expenditure* (R million) 10 000 9 000 8 550 8 000 7 191 7 000 6 000 5 000 4 714 4 619 3 944 4 000 3 000 2 000 1 000 0 F2023 F2024 F2025e F2026e F2027e ARM Platinum ARM Ferrous ARM Coal * Capital expenditure includes; (i) deferred stripping, (ii) financed fleet replacement, and (iii
Slide 38: Thank you
Thank you www.arm.co.za We do it better
Slide 39: Additional slides
Additional slides Bokoni Mine We do it better
Slide 40: PGM Mark-to-market adjustments
PGM Mark-to-market adjustments The sales price of PGM concentrate is determined on a provisional basis at the date of sale. Adjustments are made to the sales price based on movements in the discounted forward commodity prices up to the date of final pricing. Where there are any differences between t
Slide 41: Mark-to-market adjustments (R million)
Mark-to-market adjustments (R million) Modikwa Mine F2024 F2023 Realised mark-to-market adjustments (7) (135) Provisional sales value 2 769 4 392 Final sales value 2 762 4 258 Unrealised mark-to-market adjustments (12) (118) Initial provisional sales recognition 670 815 Period end provisional sales
Slide 42: Reconciliation to headline earnings (R million)
Reconciliation to headline earnings (R million) F2024 F2023* Basic earnings attributable to equity holders of ARM 3 146 8 080 Attributable after-tax impairment on property, plant and equipment - Two Rivers 1 097 - Attributable after-tax impairment on property, plant and equipment - Modikwa 376 - Att