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Fri 20 Jun 2025
Close: 16 453c 
Day's move: -547c (-3.22%)
Volume: 764 446
Trades: 3 693
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Revenue for the interim period was lower at R6.4 billion (2023: R6.6 billion) while loss from operations before capital items was R409 million (2023: profit of R212 million). Profit for the period attributable to equity holders of ARM came to R1.4 billion (2023: R1.2 billion). Furthermore, headline earnings per share was reported lower at 775 cps (2023: 1 507 cps).
Dividend declaration
ARM aims to pay ordinary dividends to shareholders in line with our dividend guiding principles. Dividends are at the discretion of the board of directors (the board) which considers the company's capital allocation guiding principles as well as other relevant factors such as financial performance, commodities outlook, investment opportunities, gearing levels as well as solvency and liquidity requirements of the Companies Act.
For 1H F2025, the board approved and declared an interim dividend of 450 cents per share (gross) (1H F2024: 600 cents per share). The amount to be paid is approximately R1 011 million.
Company outlook
The IMF projects global growth to be 3.3% in 2025 and 2026. Disinflation is likely to encourage central banks in developed and some emerging markets to lower interest rates, which could stimulate economic growth. A key risk to this outlook is the volatile trade policies being considered by the new US administration, which is likely to exacerbate global policy uncertainty, fragment global trade and worsen geopolitical tensions. The US’s withdrawal from the Paris Agreement could undermine efforts to combat global warming, increasing the risk of climate related disasters. Rolling-back of the US’s environmental commitments and “green” incentives is expected to be modestly net positive for PGM demand.
We are cautiously optimistic on South Africa’s medium to long-term growth prospects, particularly with the formation of the Government of National Unity, which could be a catalyst for a more business-friendly environment. Expectations for improved consumer and business confidence are mainly driven by lower inflation expectations, with the key to achieving this being reforms in the electricity and logistics sectors. Positive signs from Eskom’s recent performance are helping restore confidence in both business and society. However, urgent reforms in energy transition, including expansion of transmission, distribution and generation capacity, remain critical. Similarly, progress is being made with Transnet’s recovery plan and the Freight Logistics Roadmap, though additional measures are needed to enhance performance and unlock long-term value for the country’s supply chain, supporting sustainable economic growth.
Iron ore prices are expected to fall over the next year due to supply growth and a softening Chinese demand outlook. Chinese GDP growth is expected to slow to 4.5% in 2025, the weakest pace in over 30 years, excluding the Covid-19 pandemic years. Economic activity has weakened due to declines in real estate investment and slower consumption growth.
Short-term weakness in PGM prices persist despite seemingly supportive fundamentals. Near-term increases in refined PGM exports from South Africa have exceeded market expectations, while Chinese imports remain subdued. In Western markets, automotive demand remains weak, with European sales under pressure and the US market experiencing high inventory levels, leading to short-term production cuts.
However, the medium to long-term outlook for platinum, palladium, and rhodium remains positive. Demand for internal combustion engine (ICE) vehicles, including hybrids, alongside increasingly stringent emissions regulations, is expected to support consumption. Additionally, emerging applications in hydrogen technology and advanced industrial processes could provide significant long-term demand growth.
While the market remains volatile due to the disconnect between strong underlying fundamentals and negative near-term sentiment, many industry participants remain cautiously optimistic about the PGM sector’s future trajectory.
Global coal consumption is anticipated to decline in 2025 and 2026, driven by the global energy transition and increasing focus on decarbonisation. ARM is not making any new coal investments, and we will continue running existing assets to the end of their current economic lives. We are continually looking for opportunities to be more responsible and efficient in our coal-related activities.
The extensive damage to the Groote Eylandt Mining Company (GEMCO) port caused a short-lived spike in manganese ore prices in the second quarter of 2024, resulting in an oversupply of ore in a soft demand environment. High-cost supply is likely to exit the market due to the currently suppressed prices and GEMCO is expected to resume supply in the second quarter of 2025. As a result, we believe the supply demand rebalance, combined with low stock levels, is likely to result in a modest increase in manganese prices in 2025.
ARM will continue to build resilience by enhancing productivity, implementing cost-saving measures and optimising capital allocation. The challenging market conditions, including the depressed PGM market, declining iron ore price outlook, and lower manganese and thermal coal prices necessitate a focus on preserving cash while ensuring the responsible completion of ongoing capital projects. Additionally, management will evaluate opportunities to defer capital expenditure where feasible.
The year ahead will be challenging for the mining industry, despite this, we remain confident in the long-term prospects of our operations and optimistic about the future of the industry. ARM has quality, long-life assets and orebodies. We aim to focus on factors within our control and ensure active collaboration with our partners and external stakeholders, benefiting the industry, communities neighbouring our mines as well as the country. ARM remains committed to creating sustainable value for its shareholders and all stakeholders.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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