Asia Resource Minerals (ARMS) - formerly Bumi, the ill-fated coal-mining venture founded by Nat Rothschild and Indonesia's Bakrie family - completed a virtual re-launch in March. Two separate transactions effectively severed the entity's ties with the Bakries, while generating $501m (£304m) for group coffers. The good news, ostensibly, is that "at least" $400m has been earmarked for shareholders, either through a special dividend or an alternative share scheme.
The long-suffering shareholders of ARMS will be delighted that the sale of the group's stake in Bumi Resources was struck at a 215 per cent premium to the market price. But management's promise of largesse is puzzling given that it is "currently exploring a range of refinancing options to reduce interest costs".
With the Bakries out of the picture, a re-jigged management team headed by Nick von Schirnding will now concentrate on increasing operational efficiencies in response to continued market weakness. The challenge facing the chief executive is borne out by falling group revenues last year, as average prices for thermal coal output fell by 16 per cent to just under $60 a tonne. That reduced underlying cash profits by 45 per cent to $176m.
The reported bottom-line loss for ARMS narrowed appreciably, but the difference was solely down to $2.2bn in accounting charges linked to goodwill impairments and reclassified investment losses that were included in the previous year's income statement.
| ASIA RESOURCE MINERALS (ARMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 239p | MARKET VALUE: | £432m | |
| TOUCH: | 235-239p | 12-MONTH HIGH: | 310p | LOW: 180p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 586¢* | NET DEBT: | 35% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010** | nil | -0.1 | -161 | nil |
| 2011 | 1.4 | -0.1 | -176 | nil |
| 2012 (restated) | 1.5 | -2.4 | -967 | nil |
| 2013 | 1.4 | -0.2 | -88 | nil |
| % change | -7 | - | - | - |
£1 = $1.65 *Includes intangible assets of $518m, or 287¢ a share **Nine-month period | ||||
