African Rainbow Minerals Limited · JSE:ARI
African Rainbow Minerals — FY2021 Earnings Presentation
35 slides from African Rainbow Minerals's earnings presentation, Sep 1, 2021
Slide 1: Headline earnings increased by 136% to a record R13 064 million
“Headline earnings increased by 136% to a record R13 064 million driven by the iron ore and PGM operations. A final dividend of R20.00 per share was declared.” Dr Patrice Motsepe, Executive Chairman 1
Slide 2: 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 3: Results overview
Results overview Executive Chairman: Dr Patrice Motsepe Khumani Mine
Slide 4: Salient features: Safety and health
Salient features: Safety and health LOST TIME INJURY TOTAL RECORDABLE INJURY FREQUENCY RATE (LTIFR)* FREQUENCY RATE (TRIFR)** 9% to 12% to 0.41 0.81 (F2020: 0.45) (F2020: 0.92) FATALITIES COVID-19 2 fatalities at Modikwa Mine Strict protocols to prevent the spread of COVID-19 (F2020: 3 fatalitie
Slide 5: Salient features: Earnings
Salient features: Earnings HEADLINE EARNINGS SEGMENTAL EBITDA 136% to 121% to R13.0 billion R24.3 billion (F2020: R5.5 billion) (F2020: R11.0 billion) ARM FERROUS HEADLINE EARNINGS ARM PLATINUM HEADLINE EARNINGS 77% to 309% to R7.9 billion R4.7 billion (F2020: R4.5 billion) (F2020: R1.1 bill
Slide 6: Salient features: Total dividend and financial position
Salient features: Total dividend and financial position TOTAL DIVIDEND FOR THE 2021 FINANCIAL YEAR NET CASH AT 30 JUNE 2021 150% to 119% to R30 per share R8.2 billion (F2020: R12 per share) (F2020: R3.8 billion) DIVIDENDS RECEIVED FROM TWO RIVERS DIVIDENDS RECEIVED FROM ASSMANG 116% to 8%
Slide 7: Covid-19 update
Covid-19 update* TESTING AND SCREENING FOR THE 2021 FINANCIAL YEAR 142 052 7 428 2 134 Covid-19 health screenings Covid-19 tests Positive Covid-19 cases 34 employees ARM is supporting the national succumbed to Covid-19 in F2021 Covid-19 vaccine roll-out and has established vaccine sites at 5 operati
Slide 8: Headline earnings (R million)
Headline earnings (R million) 14 000 13 064 12 000 10 000 8 025 8 000 6 000 5 226 5 534 4 814 4 000 3 196 3 379 5 039 2 869 3 025 2 000 1 503 1 945 2 201 2 155 1 693 0 F2017 F2018 F2019* F2020* F2021* First half (1H) Second half (2H) 8 * The F2019 to F2021 headline earnings include re-measurement ga
Slide 9: Dividends per share (cents)
Dividends per share (cents) 3 500 3 000 3 000 2 500 2 000 2 000 1 500 1 300 1 200 1 000 1 000 650 900 700 750 500 1 000 650 500 250 400 0 F2017 F2018 F2019 F2020 F2021 Interim dividend per share Final dividend per share Total dividend declared increased by 150% compared to F2020 9
Slide 10: Headline earnings analysis by operation / division
Headline earnings analysis by operation / division (R million) Increase Decrease 16 000 153% 14 000 154 13 064 843 12 910 3 448 12 000 (5) 10 000 3 531 8 000 6 000 5 534 5 093 (441) 4 000 2 000 F2020 Net re- F2020 Platinum Ferrous Coal Corporate F2021 Net re- F2021 headline measurment adjusted adj
Slide 11: Diversified earnings
Diversified earnings EBITDA SPLIT BY COMMODITY (%) 120% 3% 2% 2% 1% 100% 4% 1% 3% 5% 19% 4% 80% 27% 29% 38% 46% 60% 46% 40% 50% 54% 37% 20% 46% 37% 17% 19% 16% 0% (3%) (4%) (20%) F2017 F2018 F2019 F2020 F2021 PGMs Iron Ore Manganese Coal (GGV) Other* Significant EBITDA contribution from PGMs and iro
Slide 12: Growth projects
Growth projects CURRENT AND FUTURE GROWTH PROJECTS Potential ramp up to 5 million tonnes of Black Rock and Ramp up to 4.4 million tonnes per manganese ore per annum subject to Gloria Projects rail availability and market conditions annum in F2023 Modikwa Chrome 288 000 tonnes of chrome Plant commiss
Slide 13: FarM
FarM African Rainbow Minerals FaxtM African Rainbow Minerals DELIVER COMPETITIVE RETURNS AND CREATE fe Entrepreneurial SUSTAINABLE VALUE management FOR ALL STAKEHOLDERS Operate @ our portfolio of assets safely, responsibly and efficiently Investing in our employees @ Focus on e value-enhancing and i
Slide 14: Operational review
Operational review Chief Executive Officer: Mike Schmidt Modikwa Mine
Slide 15: Headline earnings/(loss) by division / operation
Headline earnings/(loss) by division / operation Reviewed Audited R million F2021 F2020 % change ARM Platinum 4 666 1 142 >200 Two Rivers Mine 2 972 1 065 179 Modikwa Mine 1 529 781 96 Nkomati Mine 165 (704) ARM Ferrous 7 927 4 479 77 Iron ore division 7 522 3 687 104 Manganese division 448 836 (46)
Slide 16: EBITDA margins by commodity
EBITDA margins by commodity* 64% PGMs 49% 59% Iron Ore 53% 33% Coal (GGV) 25% 18% Manganese 31% 12% Nickel (55%) -35% -15% 5% 25% 45% 65% F2021 F2020 16 * Excludes any re-measurement and fair value gains or losses
Slide 17: ARM Ferrous
ARM Ferrous Khumani Mine core shed
Slide 18: ARM Ferrous
ARM Ferrous VARIANCE ANALYSIS – SEGMENT RESULT (R MILLION) CHANGES IN ON-MINE UNIT PRODUCTION COSTS (%) 20 000 Mining PPI 1 400 Sakura 1% at 20.6% 16 000 8 220 12 000 11 028 SA Manganese alloy operations 11% (3 796) (519) 8 000 6 153 Iron ore 13% 4 000 (430) Manganese ore 18% 0 F2020 ZAR:USD USD Pri
Slide 19: Iron ore (100% basis)
Iron ore (100% basis) SALIENT FEATURES unit F2021 F2020 % change Export sales volumes 000 tonnes 13 269 13 129 1 • Beeshoek Mine completed 18 consecutive years fatality- free and Khumani Mine completed 6.5 consecutive years Local sales volumes 000 tonnes 3 148 2 439 29 fatality-free. Export sales lu
Slide 20: Manganese ore (100% basis)
Manganese ore (100% basis) SALIENT FEATURES Unit F2021 F2020 % change Export sales volumes 000 tonnes 3 823 3 128 22 • Black Rock Mine completed 12 consecutive years fatality- free and achieved 9 million fatality-free shifts. Local sales volumes 000 tonnes 143 99 45 Change in on-mine unit • Manganes
Slide 21: Manganese alloys (100% basis)
Manganese alloys (100% basis) SALIENT FEATURES unit F2021 F2020 % change • Average realised US dollar prices for high carbon Sales volumes: manganese alloys decreased by 12% in F2021. South African operations 000 tonnes 134 107 25 • Production volumes at Sakura were impacted by multiple transformer
Slide 22: ARM Platinum
Two Rivers Mine ay ’ ARM: African “We py aia “
Slide 23: ARM Platinum
ARM Platinum VARIANCE ANALYSIS SEGMENT RESULT* (R MILLION) CHANGES IN ON-MINE UNIT PRODUCTION COSTS** (%) 14 000 12 000 7 326 1 005 PGMs: Modikwa 19% 10 272 10 000 8 000 (1 259) (241) Mining PPI PGMs: Two Rivers 6 000 0% at 20.6% 4 109 4 000 (980) Nickel (53%) 2 000 0 F2020 ZAR:USD USD Prices Volume
Slide 24: PGMs (100% basis)
PGMs (100% basis) SALIENT FEATURES Unit F2021 F2020 % change 6E PGM Production 619 071 601 068 3 • Higher US dollar prices resulted in basket prices at both ounces mines increasing by more than 70%. Modikwa cash cost R/oz 6E 14 300 11 974 19 • Two Rivers Mine production volumes increased by 15% Two
Slide 25: Two Rivers Merensky Project (100% basis)
Two Rivers Merensky Project (100% basis) The ARM, Impala and Two Rivers boards of directors approved the Merensky project at Two Rivers Mine. Annual steady state production rate of 182 000 ounces 6E, 1 600 tonnes nickel, and 1 300 tonnes of copper, with a life of mine of more than 20 years. Total ca
Slide 26: Progress on Nkomati Mine care and maintenance
Progress on Nkomati Mine care and maintenance Nkomati Mine was placed on care and maintenance in March 2021 in line with the strategy previously communicated. The most recent assessment estimates the attributable undiscounted rehabilitation costs at 30 June 2021 to be R679 million (discounted R596 m
Slide 27: ARM Coal
Mifdrals = —| Ceuhirs
Slide 28: ARM Coal
ARM Coal VARIANCE ANALYSIS – SEGMENT RESULT (R MILLION)* CHANGES IN ON-MINE UNIT PRODUCTION COSTS (%) 200 123 32 166 160 71 (6) Coal: PCB 7% 120 80 66 (107) Mining PPI 40 (13) at 20.6% 0 Coal: GGV 17% F2020 ZAR:USD USD Volume Costs Other Re- F2021 Prices measure- ment gains 0% 5% 10% 15% 20% 25% CHA
Slide 29: GGV and PCB (100% basis)
GGV and PCB (100% basis) SALIENT FEATURES Unit F2021 F2020 % change Export sales volumes Mt 11.89 12.02 (1) • Thermal coal prices increased in F2021 due to the global Domestic sales volumes Mt 4.80 7.99 (40) economic recovery and supply shortages. GGV on-mine production costs R/t 506 431 17 • Produc
Slide 30: Capital allocation
Capital allocation Finance Director: Tsundzukani Mhlanga Modikwa Mine
Slide 31: Cash flow analysis (R million)
Cash flow analysis* (R million) Interest Investing in and debt Shareholder Sources of funds existing business repayments returns Other 19 000 4 082 17 000 15 000 (2 291) 313 7 802 13 000 (1 657) (384) 11 000 816 3 9 655 9 000 (3 322) (1 219) 7 000 5 512 5 000 3 000 Balance 1 Cash Dividends Taxation
Slide 32: Net cash and debt (R million)
Net cash and debt (R million) Restated 30 June 2021 30 June 2020 Cash and cash equivalents * 9 671 5 715 Total borrowings (1 469) (1 978) Long-term borrowings (1 105) (1 565) Short-term borrowings (364) (413) Net cash* 8 202 3 737 Total equity 43 776 34 108 Net cash to equity ratio 18.7% 11.0% Add b
Slide 33: Segmental capital expenditure (R million)
Segmental capital expenditure* (R million) 7 000 6 100 5 800 6 000 5 400 5 000 4 105 4 000 3 506 3 338 3 000 2 526 2 352 2 383 2 000 1 000 0 F2016 F2017 F2018 F2019 F2020 F2021 F2022e** F2023e** F2024e** ARM Platinum ARM Ferrous ARM Coal * Capital expenditure includes (i) deferred stripping, (ii) fi
Slide 34: Summary of re-measurement and fair value gains / (losses)
Summary of re-measurement and fair value gains / (losses) (R million) F2021 F2020 ARM Mining Consortium (Modikwa) (119) (112) ARM Mining Consortium (Modikwa) - intercompany (137) (127) Anglo American Platinum (6) (8) Non-controlling interest 24 23 ARM Coal 242 485 Goedgevonden Mine 206 206 PCB opera
Slide 35: Thank you
Thank you Control room at Black Rock Manganese Ore Mine
African Rainbow Minerals — FY2021 Earnings Presentation on 6ix