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ASR
ASR
ASR - Assore - Interim Results For The Half-Year Ended 31 December 2007 and
dividend declaration
Assore Limited
(Incorporated in the Republic of South Africa)
Registration number: 1950/037394/06
Share code: ASR
ISIN: ZAE000017117
("Assore")
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
- Higher US dollar prices and increased sales volumes for all products
- Headline earnings increased by 118,3% to R651,6 million
- Interim dividend increased from 150 cents to 250 cents per share
CONSOLIDATED INCOME STATEMENT
Half-year ended Year ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
Turnover 2 965 965 1 864 865 4 293 036
Cost of sales (1 989 074) (1 402 621) (3 174 247)
Gross profit 976 891 462 244 1 118 789
Profit on disposal
of
available-for-sale 22 350 - 43 025
investments
Other income 151 526 99 152 233 113
Other expenses (95 790) (92 766) (195 017)
Finance costs (14 411) (8 538) (27 471)
Profit before
taxation and
State`s share of 1 040 566 460 092 1 172 439
profits
Taxation and State`s (341 869) (148 577) (369 084)
share of profits
Profit for the 698 697 311 515 803 355
period
Earnings
attributable to:
Shareholders of the
holding company 670 926 299 939 774 704
Minority interests 27 771 11 576 28 651
As above 698 697 311 515 803 355
Earnings per share 2 485 1 108 2 863
(cents)
Headline earnings 2 413 1 102 2 720
per share (cents)
Dividends per share
declared in
respect of the
abovementioned
earnings (cents) 250 150 350
- Interim 250 150 150
- Final 200
Determination of
headline
earnings per share
Attributable 670 926 299 939 774 704
earnings as above
Profit on disposal
(net of tax) of:
- Available-for-sale (19 110) - (36 786)
investments
- Property, plant (191) (1 427) (1 897)
and equipment
Headline earnings 651 625 298 512 736 021
Weighted average
number of
ordinary shares
(million)
Ordinary shares in 28,00 28,00 28,00
issue
Treasury shares (1,00) (0,92) (0,94)
Weighted average 27,00 27,08 27,06
ordinary shares
Net asset value per 145,7 103,5 121,4
share (Rand)
Capital expenditure 823,6 365,6 1 173,2
(R million)
Capital commitments 1 363,3 2 234,4 1 785,9
(R million)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Half-year ended Year ended
31 December 31 December 30 June
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
SHARE CAPITAL AND
RESERVES
Balance at beginning 115 197 53 438 53 438
of period
Net increase in the
market value
of available-for-sale 69 650 36 310 76 791
investments
Deferred capital
gains taxation on
changes in market
value of
available-for-sale (9 408) (5 265) (7 566)
investments
Foreign currency
translation reserve
arising on (1 389) 42 270
consolidation
Repurchase of (27 407) (7 369) (7 736)
treasury shares
Balance at end of 146 643 77 156 115 197
period
RETAINED EARNINGS
Balance at beginning 3 115 510 2 421 878 2 421 878
of period
Attributable profit 670 926 299 939 774 704
for the period
Ordinary dividends
declared and paid
No. 101 aggregating
R2,00 per share
(2006: R1,50 per (54 048) (42 000) (81 072)
share)
Balance at end of 3 732 388 2 679 817 3 115 510
period
PER BALANCE SHEET 3 879 031 2 756 973 3 230 707
CONSOLIDATED BALANCE SHEET
At At At
31 December 31 30 June
December
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and 3 673 968 2 312 3 003 319
equipment, 387
investment
properties and
intangible assets
Available-for-sale 429 928 206 060 236 119
investments
Total non-current 4 103 896 2 518 3 239 438
assets 447
Current assets
Inventories 1 126 740 900 338 976 047
Trade and other 981 427 683 389 798 519
receivables
Cash resources 303 994 146 736 309 457
Total current assets 2 412 161 1 730 2 084 023
463
TOTAL ASSETS 6 516 057 4 248 5 323 461
910
EQUITY AND
LIABILITIES
Share capital and
reserves
Ordinary 3 879 031 2 756 3 230 707
shareholders` 973
interest
Minority 45 780 40 582 48 673
shareholders`
interest
Total equity 3 924 811 2 797 3 279 380
555
Non-current
liabilities
Deferred taxation 630 288 555 915 620 597
Long-term 273 349 127 245 156 955
liabilities
Total non-current 903 637 683 160 777 552
liabilities
Current liabilities
Interest-bearing 650 841 309 516 544 770
Non-interest-bearing 1 036 768 458 679 721 759
Total current 1 687 609 768 195 1 266 529
liabilities
TOTAL EQUITY AND
LIABILITIES 6 516 057 4 248 5 323 461
910
CONSOLIDATED CASH FLOW STATEMENT
Half-year ended Year ended
31 31 December 30 June
December
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash generated from 714 824 347 571 974 081
operations
Cash utilised in (925 423) (408 184) (1 144 954)
investing activities
Cash generated by
financing activities 205 136 35 514 308 495
(Decrease)/increase in
cash for the period (5 463) (25 099) 137 622
Cash resources at
beginning of period 309 457 171 835 171 835
CASH RESOURCES PER
BALANCE SHEET 303 994 146 736 309 457
DECLARATION OF INTERIM DIVIDEND
Interim dividend No. 102 of 250 cents per share was declared on 18 February
2008, in the currency of the Republic of South Africa. In accordance with
STRATE, the following dates apply to the dividend declared:
The last date to trade to qualify for the dividend (and for changes of address
or dividend instructions) will be Friday, 7 March 2008.
The company`s ordinary shares will commence trading "ex" dividend from the
commencement of business on Monday, 10 March 2008.
The record date will be Friday, 14 March 2008.
Dividend cheques in payment of this dividend to holders of certificated shares
will be posted on or about Monday, 17 March 2008. Electronic payment to holders
of certificated shares will be undertaken simultaneously.
Holders of dematerialised shares will have their accounts at their Central
Securities Depository Participant or broker credited on Monday, 17 March 2008.
Share certificates may not be dematerialised or rematerialised between Monday,
10 March 2008 and Friday, 14 March 2008, both days inclusive.
On behalf of the board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
21 February 2008
COMMENTARY
Headline earnings for the six months to 31 December 2007 have increased by
118,3% to R651,6 million due to the significant increase in the earnings of
Assmang Limited (Assmang) further benefiting from the increased commission
earned on the sales of group products. Assore holds a 50% interest in Assmang
which is proportionately consolidated in accordance with International Financial
Reporting Standards (IFRS).
Assmang`s headline earnings increased by 118,2% to R1 146,4 million compared to
the same period of the previous year due to increased sales volumes for all
products as indicated in the table below and significantly higher US dollar
prices in particular for manganese ores and alloys. Markets for all products
remained strong throughout the period with prices and volumes driven by
increased production of carbon and stainless steels worldwide, particularly in
China.
SALES VOLUMES
Assmang`s turnover for the period under review reached a record level of R4,4
billion
(2006: R2,6 billion) and sales volumes for all products were also at record
levels as reflected in the table below:
Metric tons 2007 2006 % change
`000
Iron ore 3 286 2 783 +18,1
Manganese 1 434 1 046 +37,1
ore*
Manganese 122 109 +11,9
alloys*
Charge chrome 115 107 + 7,5
Chrome ore* 116 69 +68,1
*Excluding intra-group sales
CAPITAL EXPENDITURE
The bulk of the group`s capital expenditure occurs in Assmang, which amounted to
R1 583,5 million (2006: R656,8 million) during the period under review. Of this
R1 307,0 million was spent on the construction of the first phase of the new
Khumani Iron Ore mine (Khumani) and R51,9 million on a furnace rebuild at
Assmang`s Cato Ridge Works ferromanganese smelter.
Run of mine production for commissioning purposes has commenced at Khumani and
final production build-up is expected to commence in April 2008 reaching full
capacity of 10 million sales tons per annum by July 2009. The project is
expected to be completed on time and within the budget of R4,2 billion. Further
expansion to increase capacity to 20 million tons per annum is under
investigation but will depend largely on the successful conclusion of
negotiations with Transnet on increasing the capacity of the Sishen Saldanha
railway line and port facilities. The Khumani project has been funded mainly
from internally generated cash flow together with bank facilities established at
the Assmang level.
Discussions are also under way with Transnet with regard to expanding the
capacity of the Port Elizabeth Dry Bulk Terminal and the associated railway line
from the mines in the Northern Cape. Assmang uses the terminal for the export of
manganese ore but is currently also exporting additional volumes through the
ports of Durban and Richards Bay.
OUTLOOK
Prices and volumes for all the group`s products are at all time record levels.
Term contracts for manganese ore commencing April 2008 are about to be renewed
and US dollar prices in the spot market have increased by over 300% on the
previously agreed contract price. This increase will support substantially
higher prices for manganese alloys for at least the remainder of the calendar
year.
Sales volumes of iron ore will rise as additional capacity becomes available at
Khumani and contract prices for the year commencing April 2008 are expected to
increase by approximately 70%.
The demand for ferrochrome and chrome ore remains strong and international
market prices have increased accordingly.
Production at both the mines and works could be negatively affected by the
interruptions to power supply which are being experienced in South Africa at
present and the US dollar and Euro exchange rates will continue to be an
important factor in the determination of earnings for the remainder of the
financial year.
DIVIDENDS
The results in the announcement include the final dividend relating to the
previous financial year of 200 cents (2006: 150 cents) per share which was
declared on 29 August 2007 and paid to shareholders on 25 September 2007. Based
on the increased earnings for the period the board has declared an interim
dividend of 250 cents (2006: 150 cents) per share which will be paid to
shareholders on or about 17 March 2008. In accordance with generally accepted
accounting practice this interim dividend is not included in the results for the
period under review as it was declared after 31 December 2007.
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial statements have been prepared on the historical cost basis, except
for financial instruments that are fairly valued, in accordance with IAS34 -
Interim Reporting, issued by the International Accounting Standards Board and
incorporate the accounting policies which are consistent with those adopted in
the financial year ended 30 June 2007, with the exception of the adoption of the
following policies in response to changes in IFRS:
IFRS 4 Insurance contracts
IFRS 7 Financial instruments - disclosure
IAS 1 Presentation of financial statements
IFRIC11 Scope of IFRS 2 - Share-based payments
The adoption of these amendments, standards and interpretations has had no
effect on the financial statements of the group except for the disclosure of
additional information.
Registered office Transfer office Directors
Assore House Computershare Executive
Investor
15 Fricker Road Services 2004 Desmond Sacco
(Pty) Limited (Chairman)
IIlovo Boulevard 70 Marshall RJ Carpenter (Deputy
Street Chairman)
Johannesburg 2196 Johannesburg CJ Cory (Chief
2001 Executive Officer)
PC Crous (Technical
and Operations)
Company Non-executive
secretaries
African Mining and PN Boynton
Trust Company BM Hawksworth
Limited
MC Ramaphosa
Dr JC van der Horst
Assore Limited Alternate
Company JW Lewis (British)
registration
number:
1950/037394/06
Share code: ASR NG Sacco
ISIN: ZAE000017117
www.assore.com PE Sacco
R Smith
Date: 21/02/2008 16:55:27 Produced by the JSE SENS Department.
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