African Rainbow profit falls

Diversified miner African Rainbow Minerals (ARM) - controlled by billionaire Patrice Motsepe - saw its annual profit fall because of lower commodity prices and a strong rand against the dollar.

Releasing its results on Monday, the company said headline earnings were down 26 percent to R1.7 billion from R2.3bn a year ago.

Headline earnings per share came in at 807 cents compared to 1094 cents in the previous financial year.

However, ARM declared an increased dividend of 200 cents per share, compared to 175 cents per share previously.

Looking ahead, the company said it believed demand for ferrous commodities would be driven by the development of steel manufacturing capacity in China, India, Brazil and other developing economies seeking to build infrastructure.

Supply growth would be constrained by infrastructure limitations.

"Our three new mines which are currently ramping up are coming into steady state production at an opportune time."

ARM would increase its copper exposure in order to take advantage of the improved prices.

"Our operating teams will continue to deliver projects on time and within budget and will continue to contain unit costs."

ARM said it was "confident" about the future as it was well-positioned financially to continue to grow a profitable asset base with its focus on long-life, low cost mines.

The planned attributable capital spend was about R10bn over the next three years to June 2013, which included the development of the first phase of its investment into copper.

"This capital expenditure is expected to be funded from operating cash flows and by utilising available cash and borrowing resources.

"The continuing low gearing of the ARM balance sheet provides increased opportunity for growth beyond that currently planned," ARM said.