African Rainbow Minerals reports 47% drop in headline earnings for 2025, share price falls

African Rainbow Minerals’ (ARM) share price plunged 7.3% on Friday after it reported a 47% decline in headline earnings for the year ended 30 June 2025 to R2.7 billion, or R13.79 a share.

On Friday afternoon, the share price was R175.28, reflecting an 11.4% increase over the past 12 months. Revenue for the year increased by 1% to R13.1 billion. The decline in headline earnings was ascribed mainly to lower average realised export US dollar iron ore prices and increased mechanised development costs at Bokoni.

A final dividend of R6 a share was declared, down from R9 per share last year. The total dividend for the 2025 financial year came to R10.50, compared to R15 per share in 2024.

Despite the lower dividend, directors stated they maintained a robust balance sheet, with R6.61bn in cash compared to R7.2bn at the end of the 2024 year.

They noted that during the year, a marginal increase in the average US dollar platinum group metals (PGM) basket price and the marginally higher manganese ore and alloy prices were offset by lower thermal coal prices, lower export iron ore prices, and a stronger average rand/US dollar exchange rate.

Unit cash costs growth for PGMs and iron ore improved, increasing in line with inflationary cost increases.

The contribution to headline earnings from the ARM Ferrous segment fell by 31% to R3.47bn, while the contribution from ARM Platinum fell 42% to R1.29bn. ARM Coal’s contribution slumped 88% to R47m, and the contribution from ARM Corporate and other declined by 14% to R464m.

There was a 120% increase in headline earnings in the manganese division, driven by an increase in manganese ore sales volumes and average manganese ore sales prices.

Lower headline earnings in the iron ore division were mainly due to lower export US dollar iron ore prices, lower local sales volumes, and the stronger rand/US dollar exchange rate.

Included in the “ARM Corporate and other” segment were dividends from Harmony of R240m (R166m) and management fees from Assmang of R1.37bn (R1.5bn).

In an effort to cut costs, a decision was taken to suspend early ounces mining operations at Bokoni at the end of the 2025 financial year.

“We are now advancing capital development of the larger mine in a way that ensures its long-term sustainability. We remain confident in our approach to unlock value from Bokoni’s exceptional resource base while exercising strict capital discipline considering the ongoing PGM price uncertainty.”

A hedging collar transaction was implemented over 24% of ARM’s equity in Harmony.

The Cato Ridge Works and Alloys were closed, and certain land assets of Assmang and Assmang’s interest in Sakura were disposed of.

ARM also increased its stake in Surge Copper Corp to 19.9% through a private placement and earlier top-up purchase, strengthening its position as Surge advances its pre-feasibility study scheduled for completion in 2026.

There were three fatalities at the group’s operations during the year.

At the end of June, construction of the solar plant for ARM's PGM operations reached completion. Electricity from this plant will be supplied to the mining operations through a Power Purchase Agreement (PPA) by the second quarter of the 2026 financial year.

ARM Platinum reported a headline loss of R1.3bn (R910m), largely due to higher operational losses at Bokoni.

Two Rivers Mine headline earnings increased 20% to R202m, mainly due to a 2% improvement in the average PGM rand basket price. The mine's production decreased marginally, while unit cash costs increased by 5%.

Modikwa Mine reported a headline loss of R43m (R121m). The mine's production decreased by 3%, while unit cash costs increased by 3%.

Bokoni Mine reported a headline loss of R1.4bn (R566m), Bokoni ramped up its operations; however, it was negatively impacted by operational challenges, high fixed costs associated with early ounce production, and increased mechanised development costs.

Nkomati Mine reported an attributable headline loss of R55m (R391m).

ARM Coal’s decline in headline earnings was driven mainly by a reduction in the realised coal price as well as lower saleable volumes.

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