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We do it better to create sustainable value

Integrated salient features

Key performance indicators

  • Financial
    • Headline earnings per share (HEPS) increased 94% to 1 599 cents per share from 807 cents per share in F2010.
    • The ARM EBITDA margin increase substantially from 35% in F2010 to 43% in F2011.
    • Return on operational assets improved from 15.2% in F2010 to 24.1% in the year under review.
    • Capital expenditure (capex) increase to R3.4 billion from R2.7 billion in F2010 as ARM continued to progress its growth projects.
    • ARM is in a strong financial position with net cash of R599 million as at end June 2011.
  • Non-financial
    • Regrettably, a fatality occured at Machadodorp Works.
    • Excellent improvement in safety performance, Lost Time Injury Frequency Rate (LTIFR) was 0.43 (F2010: 0.77)
    • ARM certified as a Best Employer South Africa (2011/2012) by the CRF Institute.
    • Total Corporate Social Responsibility Investment of R124.5 million (F2010: R72.9 million).
    • 15 342 employees and contractors received HIV counselling during the year and 10 836 employees and contractors tested for HIV.
    • Climate change strategy and policy being formulated.
Integrated salient features

  • Financial

    Headline earnings and dividends per share
    • Headline earnings increased by 94% to R3.32 billion (F2010: R1.71 billion). The headline earnings per share were 1 559 cents compared to 807 cents in F2010.
    • Dividend increased substantially by 125% to 450 cents per share (F2010: 200 cents per share).
    • Cash generated by operations increased by 72% to R5.9 billion from R3.4 billion in F2010.
    • Robust balance sheet with net cash (excluding partner loans) of R2 594 million (F2010: R1 811 million).
    • Attributable headline earnings from iron ore increased 224% to R2.3 billion.
  • Operational

    Net cash/(net debt) excluding partner loans
    • Increased production volumes at ARM Ferrous as well as at the Nkomati Nickel and Goedgevonden Coal operations.
    • Unit operating costs well controlled at the manganese ore, ferrochrome, Two Rivers and Modikwa platinum operations.
    • Good progress in growth projects
      • Khumani Iron Ore Expansion Project from 10 to 16 million tonnes per annum is ahead of schedule and well within budget
      • Nkomati Nickel Mine expansion commissioned, plant recoveries lower than anticipated due to oxidised ore
      • The Goedgevonden Coal Mine is at design capacity
      • Konkola North Copper Project progresses on budget and on schedule to produce first copper in December 2012.
  • Sustainability

    Total labour (as at 30 June 2011)
    • Modikwa achieved 8 million fatality-free shifts.
    • Significant improvement in safety performance: Lost Time Injury Frequency Rate (LTIFR) reduced to 0.43 from 0.77 in F2010 (calculated per 200 000 man hours worked).
    • Continued improvement in the implementation of HIV & Aids and Tuberculosis (TB) management programmes, resulting in the TB cure rate increasing consistently to 85% during F2011 and F2010 (from 62% in F2009).
    • Total Corporate Social Responsibility expenditure (CSI, LED and BBEE Trust) of R124.5 million compared to R72.9 million in F2010.
    • Improvement in employment equity and gender diversity – Mining Charter targets continue to be exceeded.
    • Our improved data collection systems allowed us to comprehensively and consistently identify, analyse, evaluate and regularly revisit our material environmental risks and opportunities.
Key performance indicators
 

Operational review

  • ARM Platinum
      F2011F2010%
    change
    Headline earningsRm460521(12)
    EBITDA margin%3035 
    EBITDARm1 4571 541(5)
    See the full review
  • ARM Ferrous
      F2011F2010%
    change
    Headline earningsRm2 8971 364112
    EBITDA margin%5038 
    EBITDARm4 7282 45992
    See the full review
  • ARM Coal
      F2011F2010%
    change
    Headline earningsRm(103)(17)<(200)
    EBITDA margin%4354 
    EBITDARm21711490
    See the full review
  • ARM Copper
    Konkola North Copper Project
    • Measured and Indicated resource of 57.4 million tonnes at 2.42% copper.
    • 2.5 million tonnes milled yielding 45 000 tonnes of copper in concentrate per annum.
    See the full review
  • ARM Exploration

    The focus of the ARM Exploration Division is to identify and assess quality business opportunities in sub-Saharan Africa.

    A highly skilled and experienced exploration team has been established and will be under the leadership of Mr. Jan Steenkamp.

    See the full review
  • Gold: Harmony

    For the financial year ended 30 June 2011, Harmony’s annual gold production was lower at 1.3Moz, largely due to the shaft closures during the 2011 financial year. Total revenue for the year increased from R11.3 billion to R12.4 billion.

    See the full review

Management review

Executive Chairman's report

The ARM Management team continues to deliver outstanding results.

Patrice Motsepe,
ARM Executive Chairman
Chief Executive's report

ARM delivered solid increases in production in the 2010 financial year.

André Wilkens, ARM Chief Executive
Financial Director's report

The ARM headline earnings of R3 319 million for F20110 represent a significant 94% increase over the previous financial year.

Mike Arnold, ARM Financial Director