Salient features

“ARM is financially robust and continues to invest significant funds to grow the Company despite the massive global economic crisis.”

Patrice Motsepe, ARM Executive Chairman

Financial Headline earnings decrease by 42% from R4.0 billion to R2.3 billion, impacted by the global economic recession. Headline earnings per share of 1 094 (F2008: 1 906) cents. Ferrous Division raises contribution to basic earnings by 14% to R3 160 million, paying ARM dividends of R2 151 million. Profit from operations before exceptional items decrease 44% from R6.7 billion to R3.7 billion. Capital expenditure (capex) of R3.3 billion – ARM forecast capex to be more than R8 billion over the next three years. TEAL’s shareholding restructured as ARM forms 50:50 joint venture with Vale. ARM corporate loan of R967 million refinanced; new facility increased to R1.75 billion and extended for three years. The declaration of a dividend of 175 cps (F2008: 400 cps).

Operational All operations remain cash flow positive despite the global recession. Record sales for PGMs and iron ore. Production volumes decrease for other commodities due to fall in demand. Khumani 10 mtpa mine completed on time and within budget; a further 6 mtpa expansion approved. Goedgevonden and Nkomati expansion projects start commissioning. Restructuring at all operations completed, stockpiles rebuilt and retrenchments minimised.

Sustainability Modikwa achieves 5 million fatality-free shifts (second South African mining industry operation to have reached this achievement). Improvement in overall safety performance; LTIFR decreases from 6.08 in F2008 to 3.68 in F2009. Steady progress made in employment equity and gender diversity, with Mining Charter targets exceeded. Local Economic Development spend increases significantly to R28 million. Good progress in implementation of HIV & AIDS and TB management policy. ARM joins the International Council of Mining and Metals.

For more information see ARM Operational Overview p4, KPIs on p14, Financial Review p16, and Sustainable Development Report p89

Headline earnings and dividends (R million) ARM F2009 total average EBITDA margin Divisional margins (%) Total labour* (number of full time employees and contractors) (100% basis) * Excludes ARM Coal Loaded train wagons destined for Saldanha Bay