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ASR
ASR
ASR - Assore Limited - Interim results for the half-year ended 31 December 2010
Assore Limited
Company Registration Number: 1950/037394/06
Share code: ASR ISIN: ZAE000146932
("Assore" or "Group" or "company")
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
- Interim profit increases more than three times to R1,4 billion
- Interim dividend doubled to R2 per share
- Assmang`s Khumani Expansion Project to 14 million export tons per annum
remains on schedule
COMMENTARY
RESULTS
Headline earnings for the six months to 31 December 2010 have increased by
313,2%, to R1 392 million, compared to the same period in the previous financial
year, due to the significant increase in the earnings for the period of Assmang
Limited (Assmang), together with increased commissions earned on improved sales
prices 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 317,5% to R2 512 million compared to the same
period in the previous financial year. Recovered selling prices for all
products, which were depressed for the comparative period, contributed
positively following the global recession that set in during the last quarter of
2008.
Although market conditions have improved since December 2009, the strong South
African Rand/US Dollar exchange rate continued to negatively impact earnings.
Assmang`s turnover for the period under review improved significantly in
comparison to the same period in the previous financial year with an increase of
76,3% amounting to R8,1 billion from R4,6 billion in 2009.
SALES VOLUMES
Sales volumes for this period were lower for all commodities, except for chrome.
Volumes for iron ore were impacted by derailments and those for manganese alloys
by the rebuilding of manganese furnaces. The table below sets out Assmang`s
sales volumes for the current period:
Half-year ended
31 December 31 December %
Metric tons `000 2010 2009 change
Iron ore 4 039 4 452 (9)
Manganese ore* 1 456 1 463 (1)
Manganese alloys* 87 120 (28)
Charge chrome 91 75 21
Chrome ore* 213 99 215
* Excluding intra-group sales
CAPITAL EXPENDITURE
The bulk of the Group`s capital expenditure occurs in Assmang, where more than
R2 billion was spent on capital items in the period, mostly in the iron ore and
manganese divisions. A total of R1 565 million was spent at Assmang`s Khumani
Iron Ore mine, with R1 204 million being spent on the Khumani Expansion Project
(KEP), with an additional R156 million on waste development. R60 million was
spent at Assmang`s Black Rock Manganese Mine on the construction of a surface
plant. The expenditure programme on the KEP is planned to meet the timing of
Assmang`s increased export allocation on the Sishen-Saldanha line from 10 to 14
million tons per annum by mid-2012, which remains on schedule. A further R216
million was spent on furnace rebuilds and upgrades across Assmang`s Manganese
and Chrome divisions. Additional capital amounting to R13 million was utilised
at the Rustenburg Chrome Ore Mine, where the first of two underground shafts
commenced commercial production, while the second is expected to be in full
production within the next 18 months.
OUTLOOK
Despite record steel production during 2010 and industry forecasts that
production in 2011 will be even higher, driven by the demand from China and
other Asian countries, the outlook for the Group`s commodities is mixed. Iron
ore demand and prices continue to be robust, however the market for manganese
ore and alloys together with charge chrome and chrome ore are reasonably
balanced at present and are not expected to change significantly for the
remainder of the year.
DIVIDENDS
The results in the announcement include the final dividend relating to the
previous financial year of 240 cents (2009: 200 cents) per share, which was
declared on 1 September 2010 and paid to shareholders on 27 September 2010.
Based on the increased earnings for the current period, the board has increased
the company`s interim dividend, in the amount to 200 cents (2009: 100 cents) per
share, which will be paid to shareholders on or about 14 March 2011. In
accordance with IFRS, this interim dividend is not included in the results for
the period under review as it was declared after 31 December 2010.
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial results for the period under review have been prepared in
accordance with IAS 34 - Interim Reporting, on the historical cost basis, except
for financial instruments which are fairly valued. The accounting policies
applied are consistent with those adopted in the financial year ended 30 June
2010, with the exception of the amendments to:
IFRS 2 - Share-based Payment; and
IAS 32 - Financial Instruments: Presentation.
These changes, together with IFRIC 19 - Extinguishing Financial Liabilities with
Equity Instruments, and a set of improvements that represent mostly minor
changes, published by the International Accounting Standards Board, did not have
any impact on the results or disclosures of the Group. The comparatives for
earnings and dividends per share, and weighted average number of ordinary shares
in issue have been restated for the sub-division of 5 for 1 ordinary shares on
10 September 2010.
DECLARATION OF INTERIM DIVIDEND
Interim dividend No. 108 of 200 cents per share was declared for the six month
period ended 31 December 2010 in the currency of the Republic of South Africa.
In accordance with Strate Limited, the following dates apply to the dividend
declared:
The last trading date to qualify for the dividend (and for changes of address
or dividend instructions) will be Friday, 4 March 2011.
The company`s ordinary shares will commence trading "ex dividend" from the
commencement of business on Monday, 7 March 2011.
The record date will be Friday, 11 March 2011.
Dividend cheques in payment of this dividend to holders of certificated shares
will be posted on or about Monday, 14 March 2011. 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, 14 March 2011.
Share certificates may not be dematerialised or rematerialised between Monday, 7
March 2011 and Friday, 11 March 2011, both days inclusive.
On behalf of the board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
16 February 2011
CONSOLIDATED INCOME STATEMENT
Half-year ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 4 768 682 2 752 752 7 565 582
Turnover 4 553 507 2 550 160 7 085 669
Cost of sales (2 420 111) (1 937 504) (4 787 703)
Gross profit 2 133 396 612 656 2 297 966
Other income 221 785 267 484 623 818
Other expenses (205 493) (265 498) (463 691)
Finance costs (40 137) (61 760) (123 633)
Profit before 2 109 551 552 882 2 334 460
taxation and State`s
share of profits
Taxation and State`s (706 284) (211 085) (822 963)
share of profits
Profit for the 1 403 267 341 797 1 511 497
period
Earnings
attributable to:
Shareholders of the 1 392 501 338 114 1 479 524
holding company
Non-controlling 10 766 3 683 31 973
shareholders
As above 1 403 267 341 797 1 511 497
Earnings as above 1 392 501 338 114 1 479 524
Profit on disposal (537) (1 208) (1 983)
(net of tax) of
property, plant and
equipment
Impairment of non- - - 16 664
financial assets
Headline earnings 1 391 964 336 906 1 494 205
Earnings per share 1 164 283 1 236
(basic and diluted -
cents)
Headline earnings 1 163 282 1 248
per share (basic and
diluted - cents)
Dividends per share
declared in respect
of the profit
for the period 200 100 340
(cents)
- Interim 200 100 100
- Final 240
Weighted average
number of ordinary
shares (million)
Ordinary shares in 139,61 137,85 138,45
issue
Weighted impact of (19,94) (18,20) (18,75)
treasury shares
119,67 119,65 119,70
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Half-year ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Audited
R`000 R`000 R`000
Profit for the period 1 403 267 341 797 1 511 497
(as above)
Other comprehensive 155 293 178 759 143 705
income for the period
net of tax
Net gain on 185 132 208 488 167 095
revaluation of
available-for-sale
investments to market
value
Deferred capital gains (25 918) (29 100) (23 393)
taxation thereon
159 214 179 388 143 702
Exchange differences (3 921) (629) 3
on translation of
foreign operations
Total comprehensive 1 558 560 520 556 1 655 202
income for the period
net of tax
Attributable to:
Shareholders of the 1 547 794 516 873 1 623 229
holding company
Non-controlling 10 766 3 683 31 973
shareholders
As above 1 558 560 520 556 1 655 202
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At At At
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and
equipment, investment
properties and 7 225 307 5 617 492 6 409 473
intangible assets
Investments 787 982 644 346 602 851
- available-for-sale
- other 77 168 42 663 73 266
Other non-current 45 217 - 31 906
financial assets
Total non-current 8 135 674 6 304 501 7 117 496
assets
Current assets
Inventories 2 093 667 1 868 563 1 771 977
Trade and other 1 536 430 715 968 1 481 046
receivables
Cash resources 1 844 759 2 247 272 1 907 909
Total current assets 5 474 856 4 831 803 5 160 932
TOTAL ASSETS 13 610 530 11 136 304 12 278 428
EQUITY AND LIABILITIES
Share capital and
reserves
Ordinary shareholders` 9 128 027 6 880 759 7 867 444
interest
Non-controlling 96 202 74 898 102 035
interests
Total equity 9 224 229 6 955 657 7 969 479
Non-current liabilities
Net deferred taxation 1 949 783 1 479 976 1 713 730
liabilities
Long-term liabilities 223 318 253 706 219 067
Total non-current 2 173 101 1 733 682 1 932 797
liabilities
Current liabilities
Interest-bearing 1 078 256 1 528 952 1 031 644
Non-interest-bearing 1 134 944 918 013 1 344 508
Total current 2 213 200 2 446 965 2 376 152
liabilities
TOTAL EQUITY AND 13 610 530 11 136 304 12 278 428
LIABILITIES
Net asset value per 76,9 58,1 66,6
share (Rand)
Capital expenditure (R 1 050,8 680,7 1 749,3
million)
Capital commitments (R 3 282,4 3 994,8 3 013,5
million)
CONSOLIDATED STATEMENT OF CASH FLOW
Half-year ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash generated from 1 052 720 460 1 329 208
operations
Cash utilised in (1 064 135) (699 306) (1 797 439)
investing activities
Cash utilised by (51 735) (102 949) (672 927)
financing activities
Decrease in cash for (63 150) (801 795) (1 141 158)
the period
Cash resources at 1 907 909 3 049 067 3 049 067
beginning of period
CASH RESOURCES PER
STATEMENT OF
FINANCIAL POSITION 1 844 759 2 247 272 1 907 909
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Half-year ended Year ended
31 December 31 December 30 June
2010 2009 2010
Unaudited Unaudited Audited
R`000 R`000 R`000
Share capital, share
premium and
other reserves
Balance at beginning 529 210 151 762 151 762
of period
Shares issued - - 233 743
Other comprehensive 155 293 178 759 143 705
income
Balance at end of 684 503 330 521 529 210
period
Treasury shares
Balance at beginning (2 359 028) (2 125 285) (2 125 285)
of period
Treasury shares - - (233 743)
issued during period
Balance at end of (2 359 028) (2 125 285) (2 359 028)
period
Retained earnings
Balance at beginning 9 697 262 8 576 752 8 576 752
of period
Attributable 1 392 501 338 114 1 479 524
earnings
Ordinary dividends
declared
Number 107 at R2,40
per share
(2009: R2,00 per (287 211) (239 343) (359 014)
share)
Balance at end of 10 802 552 8 675 523 9 697 262
period
Ordinary 9 128 027 6 880 759 7 867 444
shareholders` equity
Non-controlling
interests
Balance at beginning 102 035 71 819 71 819
of period
Earnings 10 766 3 683 31 973
attributable to non-
controlling
shareholders
Dividends paid to (16 599) (604) (1 757)
non-controlling
shareholders
Balance at end of 96 202 74 898 102 035
period
Total equity 9 224 229 6 955 657 7 969 483
SEGMENTAL INFORMATION
Joint venture mining and beneficiation
R`000 Iron ore Manganese Chrome Sub-total
Half-year ended
31 December 2010
Revenues
- third party 3 987 044 3 204 236 921 297 8 112 577
- intersegment - - - -
Total revenues 3 987 044 3 204 236 921 297 8 112 577
Contribution to 1 749 747 849 501 (87 159) 2 512 089
profit
Half-year ended
31 December 2009
Revenues
- third party 1 797 336 2 408 415 504 429 4 710 180
- inter-segment - - - -
Total revenues 1 797 336 2 408 415 504 429 4 710 180
Contribution to 383 314 355 240 (136 602 492
profit 062)
* Eliminations and adjustments mainly give effect to the
elimination of the 50% share attributable to the other joint
venture party in Assmang.
SEGMENTAL INFORMATION (continued`)
Other
Marketing mining and Eliminations
and benefi- and Consoli-
R`000 shipping cation adjustments* dated
Half-year ended
31 December 2010
Revenues
- third party 582 719 129 675 (4 056 289) 4 768 682
- intersegment 268 770 1 680 (270 450) -
Total revenues 851 489 131 355 (4 326 739) 4 768 682
Contribution to 139 306 11 828 (1 262 282) 1 403 267
profit
Half-year ended
31 December 2009
Revenues
- third party 242 449 79 855 (2 279 732) 2 752 752
- inter-segment 153 806 - (153 806) -
Total revenues 396 255 79 855 (2 433 538) 2 752 752
Contribution to 71 963 (25 175) (307 483) 341 797
profit
* Eliminations and adjustments mainly give effect to the elimination of the 50%
share attributable to the other joint venture party in Assmang.
Directors: Executive: Desmond Sacco (Chairman), C J Cory (Chief Executive
Officer), R J Carpenter (Group Marketing Director), PC Crous (Technical and
Operations)
Non-executive: EM Southey, (Deputy Chairman and Lead Independent Director) MC
Ramaphosa, WF Urmson, Dr JC van der Horst Alternate: NG Sacco, PE Sacco, R
Smith
Registered office: Assore House, 15 Fricker Road, IIlovo Boulevard,
Johannesburg, 2196 Company secretaries: African Mining and Trust Company
Limited Transfer office: Computershare Investor Services (Proprietary)
Limited, 70 Marshall Street, Johannesburg, 2001
www.assore.com
Date: 16/02/2011 16:00:02 Produced by the JSE SENS Department.
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