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Assmang Limited - Group financial results
Assmang Limited
(Incorporated in the Republic of South Africa)
(Registration number 1935/007343/06)
Share code: ASG ISIN code: ZAE000030789
("Assmang" or "the Company")
HIGHLIGHTS:
- HEADLINE EARNINGS INCREASED BY 92 PER CENT TO R443 MILLION
- Attributable earnings have increased by R756 million mainly as a result of the
proceeds from the disposal of the dwarsrivier pgm`s
- NEW CHARGE CHROME FURNACE COMMISSIONED
- NEW NCHWANING MANGANESE MINE SHAFT ON SCHEDULE AND WITHIN BUDGET
Group financial results
and dividend announcement for the year ended 30 June 2002
Group financial results
The audited financial results of the Company and its subsidiaries are as
follows:
Group balance sheet
At 30 June At 30 June
2002 2001
Audited Audited
R`000 R`000
Assets
Non-current assets
Fixed assets 1 877 833 1 622 306
Deferred tax assets 11 204 27 558
Environmental 10 385 8 150
rehabilitation
trust fund
Current assets
Inventories 709 936 564 811
Trade and other 714 413 350 705
receivables
Deposits and cash 14 877 15 537
Total assets 3 338 648 2 589 067
Equity and
liabilities
Total shareholders` 2 127 254 1 188 614
interest
Non-current
liabilities
Long-term 692 2 831
borrowings
Deferred tax 379 801 288 395
liabilities
Long-term 31 197 26 729
provisions
Current liabilities
Trade and other 187 581 145 550
payables
Overdrafts and 576 849 909 767
short-term
borrowings
Taxation 35 274 27 181
Total equity and 3 338 648 2 589 067
liabilities
Group income statement
Year ended 30 June Year ended 30 June
2002 2001
Audited Audited
R`000 R`000
Turnover 2 809 352 1 926 189
Cost of sales 1 921 636 1 401 622
Gross profit 887 716 524 567
Other operating 45 248 2 302
income
Other operating 174 590 111 101
expenses
Profit from 758 374 415 768
operations
Interest received 3 518 2 496
Finance costs 72 160 68 385
Profit before 689 732 349 879
exceptional item
Exceptional item 543 720 -
Profit before
taxation and
State`s share of 1 233 452 349 879
profit
Taxation and 246 911 118 943
State`s share of
profit
Earnings 986 541 230 936
Earnings per share
(cents)
- Attributable 27 804 6 508
- Headline 12 480 6 492
Dividends per share 1 350 750
(cents)
Number of shares in
issue (`000)
- Weighted average 3 548 3 548
and at year end
Determination of
headline earnings
Earnings 986 541 230 936
Disposal of mineral (543 720) -
rights
Profit on sale of
property, plant,
equipment - (582)
Headline earnings 442 821 230 354
Group cash flow statement
Year ended 30 June Year ended 30 June
2002 2001
Audited Audited
R`000 R`000
Cash flow from
operating
activities
Cash generated from 410 157 340 667
operations
Interest received 3 518 2 496
Interest paid (72 160) (68 385)
Dividends paid (47 901) (26 612)
Taxation paid (131 058) (44 198)
Net cash in-flow
from operating
activities 162 556 203 968
cash flow from
INVESTING
activities
Additions to fixed
assets to
maintain (280 809) (285 206)
operations
Additions to fixed
assets to
expand operations (91 503) (339 174)
Proceeds from the
sale of platinum
group metal 543 720 -
mineral rights
Other 432 744
Net cash
inflow/(outflow)
from
investing 171 840 (623 636)
activities
Cash flow from
financing
activities
Long-term (1 910) (2 029)
borrowings repaid
(Decrease)/increase
in short-term
borrowings (333 147) 436 705
Net cash
(outflow)/inflow
from
financing (335 057) 434 676
activities
Net
(decrease)/increase
in cash
and cash (661) 15 008
equivalents
Cash and cash
equivalents at
beginning of year 15 537 529
Cash and cash
equivalents
at end of year 14 877 15 537
Group statement of changes in shareholders` equity
Stated Retained
capital earnings Total
Audited Audited Audited
R`000 R`000 R`000
Balance at 30 13 385 970 905 984 290
June 2000
Earnings for 230 936 230 936
the year
Ordinary (26 612) (26 612)
dividends
Balance at 30 13 385 1 175 229 1 188 614
June 2001
Earnings for 986 541 986 541
the year
Ordinary (47 901) (47 901)
dividends
Balance at 30 13 385 2 113 869 2 127 254
June 2002
Results
Revenue for the year ended 30 June 2002 rose by 45,9 per cent to R2 809,35
million and attributable earnings by 327,2 per cent to R986,54 million,
equivalent to R278,04 per share. Contributions to earnings by the three
divisions, before deducting secondary tax on companies (STC), amounted to
R504,32 million from the chrome division, R350,94 million from the manganese
division and R135,05 million from the iron ore division. Attributable earnings
include the profits on the sale of the platinum group metals (PGM) mineral
rights at Dwarsrivier to Two Rivers Platinum (Proprietary) Limited for a net
R543,72 million, which, as an exceptional item, has been excluded from headline
earnings of R442,82 million (2001: R230,35 million).
The Rand/United States dollar exchange rate has continued to be the key
determinant in the Group`s performance over the year. While US$ prices for
almost all the Group`s products declined - some significantly - the rand
equivalent showed substantial gains, led by manganese ore at an average of
around 45 per cent and iron ore at 38,5 per cent.
Sales volumes
Sales volumes for the year are set out below and, with the exception of
manganese alloys, volumes for all products have increased on the previous year:
2002 2001
`000 metric tons `000 metric tons
Iron ore 4 775 4 315
Manganese ore
(excluding
deliveries
to the Cato Ridge 993 979
Works)
Manganese alloys 187 193
Charge chrome 190 125
Chrome ore
(excluding
deliveries to
Machadodorp Works) 39 -
Major capital projects
Assmang continued its significant capital programme spending R372 million
(R626 million) during the year - the majority on its two major projects: the new
charge chrome smelter and sinter facilities at the Machadodorp Works and the new
shaft complex at Nchwaning manganese mine. Assmang has spent R1,8 billion over
the past five years on re-capitalising and enlarging the businesses in each of
its commodity divisions.
The chrome division`s new R375 million, 54 MVA furnace and a 350 000 tons per
annum pelletising plant were commissioned during the year under review. Some
start-up delays were encountered, but the furnace is currently operating well
and production will ramp-up during the current financial year.
Development of the R517 million Nchwaning shaft complex has been well managed
and the project is on schedule and within budget. On 27 June 2002, the 2 200
metre long decline shaft was holed and shaft equipping commenced during the
first half of the current financial year. It is still expected that the shaft
will be commissioned as planned during late calendar 2003. This shaft system
will increase the operational life of Assmang`s Nchwaning manganese mine by over
20 years and utilisation of the best available mining technology will result in
lower operating costs.
It is anticipated that Assmang will spend approximately R644 million in this
financial year and some R758 million in the following year on current and
additional enhancement projects. These projects will include the completion of
the Nchwaning shaft complex, the construction of an underground mine at
Dwarsrivier chrome mine to replace the existing opencast mine and the conversion
of one of the furnaces at the chrome smelter to 30MVA. Capital has also been
allocated within the manganese division, to enhance alloy production technology,
thereby improving operating margins.
Borrowings
Last year`s high level of short-term borrowings, totalling almost R910
million, has been substantially reduced following receipt of the proceeds from
the sale of the PGM mineral rights. The equivalent amount at the 30 June 2002
year end was R576,8 million.
Outlook
Sales of the Group`s products remain fairly buoyant and appear likely to
continue into this new financial year. That would indicate another good year for
world-wide steel production with the probability that both iron and manganese
ore sales should remain at about the same levels, but with lower dollar prices
than in the past year. Manganese alloy sales are anticipated to increase in line
with higher production planned at Cato Ridge and US dollar prices have improved
markedly since the year end, but are expected to come under pressure when supply
disruptions are overcome. The improvement in the stainless steel market should
at least be sustained and volumes could be substantially raised by major
contractual negotiations. Better margins for ferrochrome could flow from
improved utilisation of available capacity.
While the market position is encouraging, results may be negatively affected
if rail facilities on which exports are dependent are not fully maintained.
A number of South African exporters of bulk minerals have expressed similar
sentiments in recent months. Given the strong emphasis rightly being placed by
Government upon job creation and poverty alleviation through expansion of the
economy, the circumstances would seem to justify investigation into the
shortcomings, which undoubtedly exist in the transporting of bulk minerals for
export.
Dividends
The interim dividend was increased significantly from R2,50 to R8,50 per
share in order to distribute to shareholders a portion of the surplus that was
realised on the disposal of the PGM mineral rights. At the time of the interim
announcement, it was mentioned that this distribution was exceptional and that
the final dividend would be lower based on headline earnings.
As the Group is still significantly - although not unacceptability - geared,
the Board is pleased to announce a final dividend No.126 of R7,00 per share has
been declared payable to members.
The last date to trade, ("Cum" the dividend) in order to participate in the
dividend will be Thursday, 19 September 2002.
The Company`s ordinary shares will commence trading ("ex" the dividend) from
the commencement of business on Friday, 20 September 2002 and the record date
will be Friday, 27 September 2002.
The dividend will be paid on Monday, 30 September 2002.
No share certificates may be dematerialised or rematerialised between Friday,
20 September 2002 and Friday, 27 September 2002, both days inclusive.
Accounting policies
The Group`s financial information has been extracted from the audited Group
annual financial statements, which have been prepared in accordance with
Statements of Generally Accepted Accounting Practice in South Africa and
International Accounting Standards. The accounting policies used in the
preparation of the annual financial statements are consistent with those used in
the previous year.
Audited results
Ernst & Young has audited the Group annual financial statements. Their
unqualified audit report is available for inspection at the Company`s registered
office.
Earnings per share
Attributable earnings per share is calculated by dividing the earnings
attributable to shareholders by the weighted average number of ordinary shares
in issue during the year.
To calculate the headline earnings per share, the earnings attributable to
shareholders is adjusted for the exceptional item.
By order of the board
Anglovaal Mining Limited
Secretaries
per: A. Jepson
Registered office: 56 Main Street, Johannesburg, 2001
5 September 2002
Directors: Desmond Sacco (Chairman), R. P. Menell (Deputy Chairman), R. J.
Carpenter, C. J. Cory, P. C. Crous, D. N. Murray, B. R. Broekman, J. C.
Steenkamp.
Alternate directors: B. J. Funston, A. D. Stalker*, J. W. Lewis*, B. M. Menell,
G. C. Butler*, M. J. N. Uys, F. H. Kalp, A. McAdam*. *British
Company secretary: Anglovaal Mining Limited
Date: 05/09/2002 04:00:00 PM Produced by the JSE SENS Department
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