African Rainbow Minerals (ARM) doubled its interim dividend payout as half-year profit surged, driven by an increase in iron ore sales volume and higher prices for the steel-making ingredient and platinum group metals.
The South Africa-listed company on Wednesday declared a dividend of 10 rand per share for the six months ended December, compared with 5 rand per share a year earlier.
Headline earnings per share – the main measure of profit in the country – rose 134% to 25.87 rand during the period from 11.14 rand a year ago.
Higher iron ore and platinum group metals (PGM) prices, a weaker rand exchange rate, and a jump in export grade iron ore and manganese ore sales volumes boosted ARM’s profit, helping the miner weather the impact of the pandemic.
Mining companies have been a rare bright spot in South Africa’s battered economy, benefiting from a global rally in commodity prices.
“The mining industry has demonstrated immense resilience in the past year and is expected to play a key role in the recovery of the South African economy,” the company said in a statement.
However, the miner said production unit costs had risen above inflation at most of its operations, due to operational challenges related to covid-19 restrictions.
ARM said its strong cash position and higher earnings would allow it to invest in its existing business and pursue growth opportunities, without providing further detail.
The miner’s net cash position improved by 1.075 billion rand ($72.05 million) during the period to 4.812 billion rand.
($1 = 14.9203 rand)
(By Tanisha Heiberg; Editing by Clarence Fernandez and Subhranshu Sahu)