| Thu 25 Aug 2011, 12:00 | | ASR - Assore Limited - Final results for the year ended 30 June 2011 |
|
ASR
ASR
ASR - Assore Limited - Final results for the year ended 30 June 2011
Assore Limited
Company registration number: 1950/037394/06
Share code: ASR ISIN: ZAE000146932
("Assore" or "Group" or "Company")
- Strong iron ore prices
- Earnings more than double
- Final dividend increased to R2,50
Consolidated income statement
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Revenue 11 180 037 7 565 582
Turnover 10 547 806 7 085 669
Cost of sales (6 044 740) (4 787 703)
Gross profit 4 503 066 2 297 966
Other income 848 731 623 818
Other expenses (457 797) (463 691)
Finance costs (77 790) (123 633)
Profit before taxation and State`s 4 816 210 2 334 460
share of profits
Taxation and State`s share of (1 566 523) (822 963)
profits
Profit for the year 3 249 687 1 511 497
Attributable to:
Shareholders of the holding 3 219 755 1 479 524
company
Non-controlling shareholders 29 932 31 973
As above 3 249 687 1 511 497
Earnings as above 3 219 755 1 479 524
Profit on disposal (net of tax) of (407) (1 983)
property, plant and equipment
Impairment of non-financial assets - 16 664
Headline earnings 3 219 348 1 494 205
Earnings per share (basic and 2 691 1 236
diluted - cents)
Headline earnings per share (basic 2 690 1 248
and diluted - cents)
Dividends per share declared in 450 340
respect of the profit for the year
(cents)
- Interim 200 100
- Final 250 240
Weighted average number of 139,61 138,43
ordinary shares (million)
Ordinary shares in issue
Weighted impact of treasury shares (19,94) (18,75)
- held by Bokamoso Trust
119,67 119,68
Consolidated statement of comprehensive income
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Profit for the year (as above) 3 249 687 1 511 497
Other comprehensive income for the 204 882 143 705
year, net of tax
Net gain on revaluation of 242 336 167 095
available-for-sale investments to
market value
Deferred capital gains taxation (33 927) (23 393)
208 409 143 702
Exchange differences on (3 527) 3
translation of foreign operations
Total comprehensive income for the 3 454 569 1 655 202
year, net of tax
Attributable to:
Shareholders of the holding 3 424 637 1 623 229
company
Non-controlling interests 29 932 31 973
As above 3 454 569 1 655 202
Consolidated statement of financial position
At At
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment,
investment
properties and intangible assets 8 027 344 6 409 471
Investments 887 248 602 851
- available-for-sale investments
- other 30 790 73 267
Other non-current financial assets 53 051 31 906
Total non-current assets 8 998 433 7 117 495
Current assets
Inventories 2 005 577 1 771 977
Trade and other receivables 1 632 270 1 481 046
Cash resources 2 334 734 1 907 909
Total current assets 5 972 581 5 160 932
TOTAL ASSETS 14 971 014 12 278 427
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders` interest 10 765 526 7 867 443
Non-controlling interests 114 287 102 035
Total equity 10 879 813 7 969 478
Non-current liabilities
Net deferred taxation liabilities 2 173 621 1 713 729
Long-term liabilities 222 888 216 826
Total non-current liabilities 2 396 509 1 930 555
Current liabilities
Interest-bearing 154 147 1 031 645
Non-interest-bearing 1 540 545 1 346 749
Total current liabilities 1 694 692 2 378 394
TOTAL EQUITY AND LIABILITIES 14 971 014 12 278 427
Net asset value per share (Rand) 91,0 66,6
Capital expenditure (R million) 2 112,5 1 749,3
Capital commitments (R million) 3 282,4 3 013,5
Consolidated cash flow statement
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Cash generated from operations 3 521 328 1 329 209
Cash utilised in investing (2 193 128) (1 797 440)
activities
Cash utilised by financing (901 375) (672 927)
activities
Increase/(decrease) in cash for 426 825 (1 141 158)
the year
Cash resources at beginning of 1 907 909 3 049 067
year
Cash resources per statement of 2 334 734 1 907 909
financial position
Consolidated statement of changes in equity
Year ended Year ended
30 June 30 June
2011 2010
Reviewed Audited
R`000 R`000
Share capital, share premium and
other reserves
Balance at beginning of year 529 210 151 762
Shares issued - 233 743
Other comprehensive income 204 882 143 705
Balance at end of year 734 092 529 210
Treasury shares
Balance at beginning of year (2 359 028) (2 125 285)
Treasury shares issued during the - (233 743)
year
Balance at end of year (2 359 028) (2 359 028)
Retained earnings
Balance at beginning of year 9 697 261 8 576 752
Profit for the year 3 219 755 1 479 524
Ordinary dividends declared
Numbers 107 and 108 aggregating (526 554) (359 015)
R4,40 per share (2010: R3,00 per
share)
Balance at end of year 12 390 462 9 697 261
Ordinary shareholders` interest 10 765 526 7 867 443
Non-controlling interests
Balance at beginning of year 102 035 71 819
Total comprehensive income 29 932 31 973
Dividends paid to non-controlling (14 153) (1 760)
shareholders
Foreign currency translation (3 527) 3
reserve arising on consolidation
Balance at end of year 114 287 102 035
Total equity 10 879 813 7 969 478
Segmental information
Joint venture mining and beneficiation
R`000 Iron ore Manganese Chrome Sub-total
Year ended
30 June 2011
- Reviewed
Revenues
Third party 10 358 436 6 376 483 2 487 215 19 222 134
Inter- - - - -
segment
Total 10 358 436 6 376 483 2 487 215 19 222 134
revenues
Contribution 4 650 908 1 369 738 (233 839) 5 786 807
to earnings
Year ended
30 June 2010
- Audited
Revenues
Third party 5 002 654 6 253 174 1 789 643 13 045 471
Inter- - - - -
segment
Total 5 002 654 6 253 174 1 789 643 13 045 471
revenues
Contribution 1 436 649 1 480 222 (184 650) 2 732 221
to earnings
Segmental information (continued)
Other
Marketing mining and
R`000 and benefi- Adjust- Consoli-
shipping cation ments* dated
Year ended
30 June 2011
- Reviewed
Revenues
Third party 1 067 875 290 571 (9 400 543) 11 180 037
Inter-segment 628 448 3 388 (631 836) -
Total revenues 1 696 323 293 959 (10 032 379) 11 180 037
Contribution 408 983 (70 043) (2 905 992) 3 219 755
to earnings
Year ended
30 June 2010
- Audited
Revenues
Third party 642 336 189 986 (6 312 211) 7 565 582
Inter-segment 422 223 2 240 (424 463) -
Total revenues 1 064 559 192 226 (6 736 674) 7 565 582
Contribution 163 318 (37 431) (1 378 584) 1 479 524
to earnings
*Adjustments mainly give effect to the elimination of the 50% share
attributable to the other joint venture party in Assmang.
COMMENTARY
Earnings for the financial year to 30 June 2011 have increased by 117,6% on
the previous year to R3,2 billion due mainly to the significant increase in
the earnings of Assmang Limited (Assmang), and the resulting increased
commissions earned on the higher sales of Group products, compared to the
previous financial year. The increase in earnings for the year was due to a
stronger demand for all Group products and in particular substantially higher
prices for iron ore across the year. Strength in the iron ore price was
driven by demand from China where total steel production is expected to reach
record levels during the current calendar year. However, the effect of the
higher iron ore prices on earnings was partly offset by the impact of the
stronger Rand, particularly in the second half.
As a result of the trading conditions described above, Assmang`s earnings
increased by 111,8% to R5,8 billion compared to the previous year. Assore
holds a 50% interest in Assmang,
which is proportionately consolidated in accordance with International
Financial Reporting Standards (IFRS).
Sales volumes
In line with higher crude and stainless steel production levels, sales
volumes for iron ore and chrome products were higher in the current financial
year. In conjunction with the increased prices for iron ore, Assmang`s
turnover for the year under review increased to R19,1 billion (2010: R12,9
billion). The following table sets out the sales volumes of Assmang`s
commodities for the year under review:
2011 2010 %
`000 M tons `000 M tons change
Iron ore 10 006 9 799 2
Manganese ore* 2 882 3 095 (7)
Manganese alloys* 218 238 (8)
Charge chrome 238 189 26
Chrome ore* 373 272 37
*Excluding intra-group sales to alloy plants
Capital expenditure
The bulk of the Group`s capital expenditure occurs in Assmang, and amounted
to R4,1 billion (2010: R3,3 billion) for the year under review. The major
capital expenditure for the year occurred in the iron ore and manganese
divisions of Assmang. A total of R2,8 billion was spent on the ongoing
infrastructural development at the Khumani Iron Ore Mine, which will result
in the mine capacity increasing to 16 million sales tons per annum from 1
July 2012. R313 million was spent on rebuilding manganese and chrome furnaces
at Cato Ridge Works and Machadodorp Works. Apart from the expenditure in
Assmang, R38 million has been spent on further developing two underground
mines at the chromite mines at Rustenburg Minerals, which are expected to
meet their planned production volumes during calendar 2013.
Outlook
Although it is anticipated that world steel production will reduce marginally
in the second half of the calendar year, from the record levels in the first
half of the year, the iron ore market is expected to remain tight due to
continued strong levels of production in Asia. The world manganese and chrome
ore and alloy markets are currently in oversupply, and although prices appear
to have stabilised, it is unlikely that there will be a significant recovery
in prices in the short term. Further short term volatility is also expected,
due to the sovereign debt issues in the United States, and certain European
countries. Of particular concern to the Group, are the continuing increases
in the cost prices of electricity and other local inputs, which are placing
pressure on the sustainability of its smelting operations. Assmang and
Transnet continue to negotiate increased capacity allocation for iron and
manganese ores railed from the Northern Cape. Compounded by the above, the
results of the Group remain significantly exposed to fluctuations in exchange
rates.
Dividends
The results in this announcement include the interim dividend of 200 cents
(2010: 100 cents) per share which was declared on 15 February 2011 and paid
to shareholders on 14 March 2011. In line with the results for the year, the
Board has declared a final dividend of 250 cents per share, making a total
dividend for the year of 450 cents (2010: 340 cents) per share. The final
dividend will be paid to shareholders on or about 19 September 2011 and in
accordance with IFRS, is not included in the results in this announcement as
it was declared after year-end.
Review by auditors
LP van Breda of Ernst & Young Inc, the Group`s auditors, has reviewed and
issued an unmodified report on the financial results included in this
announcement in accordance with ISRE 2410 - Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. A copy of
their report is available for inspection at the registered office of the
Company.
Accounting policies and basis of preparation
The financial results for the year under review have been prepared under the
supervision of Mr CJ Cory, CA(SA) and in accordance with IAS 34 - Interim
Financial Reporting. The accounting policies applied are consistent with
those adopted in the financial year ended 30 June 2010. Amendments to, and
interpretations of IFRS effective in the year have not had any impact on the
results or disclosures of the Group, while no other impacts resulted due to a
set of improvements representing mostly minor changes, as published by the
International Accounting Standards Board. The comparatives for earnings and
dividends per share, and weighted average number of ordinary shares in issue
have been restated for the subdivision of 5 for 1 ordinary shares on 10
September 2010.
Event after the reporting period
The special and ordinary resolutions tabled at the general meeting of
shareholders on 10 August 2011 relating to the first phase of the Group`s
third empowerment transaction were approved by the requisite majorities of
shareholders. In terms of the transaction, 11,8% of Assore`s shares have been
warehoused in a special purpose vehicle (SPV), prior to being disposed of
into a broad-based BEE structure. In accordance with the resolutions, the
shares were acquired from Shanduka Resources (Proprietary) Limited on 19
August 2011, for which bridging finance was granted by the Standard Bank of
South Africa Limited. The impact of this transaction on the Group`s statement
of financial position is an increase in long term liabilities of R2,8
billion, and
a decrease in equity, in the form of treasury shares, of
R2,8 billion.
Directors
Since the issuing of the Company`s previous annual report, the following
changes to the board took place, on the following dates:
- 11 November 2010 - Mr RJ (Bob) Carpenter stood down as Deputy Chairman,
after 47 years of service with the Group, and on 28 February 2011 resigned as
an executive director, remaining on the Board in a non-executive capacity;
- 11 November 2011 - Mr EM (Ed) Southey was appointed as Deputy Chairman and
Lead Independent Director;
- 8 March 2011 - Mr NG Sacco resigned as alternate director;
- 3 May 2011 - Mr DMJ (Don) Ncube was appointed as an independent non-
executive director; and
- 19 August 2011 - following the conclusion of the first phase of the third
empowerment transaction, Mr MC (Cyril) Ramaphosa (and his alternate, Mr RM
Smith) resigned as non-executive director.
Declaration of final dividend
Final dividend No. 109 of 250 cents per share was declared on 24 August 2011,
in the currency of the Republic of South Africa. The salient dates are as
follows:
Last day for trading to qualify and
participate in the final dividend
(and change of address of dividend
instructions) Friday, 9 September 2011
Trading "ex dividend" commences Monday, 12 September 2011
Record date Friday, 16 September 2011
Dividend payment date Monday, 19 September 2011
Share certificates may not be dematerialised or rematerialised between
Monday, 12 September 2011 and Friday, 16 September 2011, both days inclusive.
On behalf of the Board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
25 August 2011
Directors:
Executive
Desmond Sacco (Chairman), CJ Cory (Chief Executive Officer),
PC Crous (Technical and Operations)
Non-executive
EM Southey (Deputy Chairman and Lead Independent Director)*,
RJ Carpenter, DMJ Ncube*, WF Urmson*, Dr JC van der Horst*
*Independent
Alternate
PE Sacco
Registered office
Assore House, 15 Fricker Road, IIlovo Boulevard, Johannesburg, 2196
Company secretaries
African Mining and Trust Company Limited
Sponsor
The Standard Bank of South Africa Limited
Transfer office
Computershare Investor Services (Proprietary) Limited,
70 Marshall Street, Johannesburg, 2001
www.assore.com
Date: 25/08/2011 12:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
