| Wed 1 Sep 2004, 17:15 | | Provisional Results For The Year Ended 30 June 200 |
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Assore Limited - Provisional Results For The Year Ended 30 June 2004
ASSORE LIMITED
Company registration number: 1950/037394/06
Share code: ASR
ISIN: ZAE000017117
*INCREASED SALES VOLUMES AND US DOLLAR PRICES FOR ALL PRODUCTS
*HEADLINE EARNINGS INCREASED BY 20,9% TO R163,4 MILLION
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
30 June 30 June
2004 2003
Reviewed Audited
R`000 R`000
Turnover 2 228 090 1 753 027
Net operating profit 329 501 240 820
Finance costs (25 765) (28 412)
Dividends received 5 057 5 451
Net profit before taxation 308 793 217 859
Taxation (99 583) (76 414)
Net profit from ordinary operating activities 209 210 141 445
Outside shareholders` share of net profit (39 603) (5 073)
Attributable earnings transferred
to statement of changes in equity 169 607 136 372
Earnings per share (cents) 605,7 487,0
Headline earnings per share (cents)* 583,7 482,7
Dividends per share (cents)
- Interim dividend paid in
March (2004/2003) 20 25
- Final dividend declared in September
(2004/2003) 45 25
*Determination of headline earnings
Attributable earnings per income
statement as above 169 607 136 372
Net profit on disposal of assets (6 162) (1 215)
Headline earnings 163 445 135 157
CONSOLIDATED BALANCE SHEET
At 30 June At 30 June
2004 2003
Reviewed Audited
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 1 206 192 1 056 281
Environmental rehabilitation trust funds 13 503 12 547
Listed investments 165 715 147 152
1 385 410 1 215 980
Current assets
Inventories 520 892 469 132
Amounts due from joint venture partners 9 529 -
Trade and other receivables 475 584 358 209
Cash resources 166 263 96 623
1 172 268 923 964
Total assets 2 557 678 2 139 944
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders` interest 1 549 073 1 382 513
Outside shareholders` interest 42 560 12 701
Share capital and reserves 1 591 633 1 395 214
Non-current liabilities
Deferred taxation 240 576 198 251
Long-term liabilities 55 425 34 865
296 001 233 116
Current liabilities
Interest bearing 379 166 308 622
Non-interest bearing 290 878 202 992
670 044 511 614
Total equity and liabilities 2 557 678 2 139 944
Ordinary shares in issue (million) 28 28
Net asset value per share (Rand) 56,8 49,8
Capital expenditure (R`million) 237,0 174,4
Capital commitments (R`million) 204,3 171,9
STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
30 June 30 June
2004 2003
Reviewed Audited
R`000 R`000
SHARE CAPITAL AND NON-
DISTRIBUTABLE RESERVES
Balance at beginning of year 29 459 90 138
Net increase/(decrease) in market value
of listed investments 18 065 (59 976)
Deferred taxation on changes in market
value of listed investments (2 730) 3 954
Foreign currency translation reserve (5 782) (4 657)
Balance at end of year 39 012 29 459
DISTRIBUTABLE RESERVES
RETAINED INCOME
Balance at beginning of year 1 353 054 1 234 882
Attributable earnings for the year 169 607 136 372
Ordinary dividends paid
No. 93 and No. 94 aggregating 45 cents
per share (2003: 65 cents per share) (12 600) (18 200)
Balance at end of year 1 510 061 1 353 054
PER BALANCE SHEET 1 549 073 1 382 513
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
30 June 30 June
2004 2003
Reviewed Audited
R`000 R`000
Cash generated from operations 225 690 257 030
Cash utilised in investing activities (232 003) (198 276)
Cash generated/(utilised in)
financing activities 75 953 (46 764)
Increase in cash for year 69 640 11 990
Cash resources at beginning of year 96 623 84 633
CASH RESOURCES PER
BALANCE SHEET 166 263 96 623
DECLARATION OF FINAL DIVIDEND
Final Dividend No. 95 of 45 cents per share was declared on Wednesday, 1
September 2004. The dividend has been declared in the currency of the Republic
of South Africa.
In accordance with STRATE, the following dates apply to the final dividend:
* The last date to trade to qualify for the dividend (and for changes of
address or dividend instructions) will be Thursday, 16 September 2004.
* The company`s ordinary shares will commence trading `ex` the dividend from
the commencement of business on Friday, 17 September 2004.
* The record date will be Thursday, 23 September 2004.
* Dividend cheques in payment of this dividend to holders of certificated
shares will be posted on or about Monday, 27 September 2004. Electronic
payment to holders of certificated shares will be under taken
simultaneously.
* Holders of dematerialised shares will have their accounts at their Central
Securities Depository Participant or broker credited on Monday, 27
September 2004.
* Share certificates may not be dematerialised or rematerialised between
Friday, 17 September 2004 and Thursday, 23 September 2004, both days
inclusive.
On behalf of the board
Desmond Sacco C J Cory
Chairman Chief Executive Officer
Johannesburg
1 September 2004
COMMENTARY
RESULTS
The feature of the second half of the 2004 financial year and of the year as a
whole has been the strong recovery made by Assmang Limited (`Assmang`) from the
first half when that company reported a 97% decline in earnings.
Assore continues to hold 45,7% in Assmang which it controls jointly with African
Rainbow Minerals Limited (ARM). Assore also receives commissions as marketing
agent for Assmang`s products.
As anticipated in the commentary on Assore`s interim results, published in March
2004, sales of Assmang`s products have benefited from a strong demand, largely
from Far Eastern countries, resulting in higher US dollar prices and increased
sales volumes for all commodities.
These factors more than offset the further strengthening of the South African
Rand over the US dollar during the second half, enabling Assmang to lift revenue
for the year ended 30 June 2004 by 13,8% and headline earnings by 4,9%. The
average exchange rate applicable to export proceeds over the financial year, was
R6,77 to the US dollar, compared with R8,97 for the previous year.
Assore gained additionally from the R20,2 million (2003: R3,9 million)
contribution to earnings for the year made by its US subsidiary, Minerais U.S.,
which benefited from its trading in a buoyant metals market and from increased
demand for the group`s products.
Consequently, Assore has reported a 27,1% growth in turnover to R2,23 billion
(2003: R1,75 billion) for the year ended 30 June 2004 and a 20,9% improvement in
headline earnings to R163,4 million (2003: R135,2 million) equivalent to 583,7
cents (2003: 482,7 cents) per share.
SALES VOLUMES
Sales volumes for all commodities, increased over those of the previous year as
detailed in the table below:
Sales Metric Tons
2004 2003 Percentage
Tons `000 Tons `000 increase
Iron Ore 5 460 5 263 3,7
Manganese Ore 1 438 1 171 22,8
Manganese Alloys 225 206 9,2
Charge Chrome 295 244 20,9
Chrome Ore 377 283 33,2
CAPITAL EXPENDITURE
Assmang continued its significant capital expenditure programme, spending R493,5
million (2003: R338,1 million) during the year. Of this, R182,3 million was
spent on the new shaft complex at the Nchwaning manganese mine, which has
commenced production and is currently being ramped up. The total capital cost of
the project is estimated to be R748,0 million, excluding capitalised interest.
Commitments at 30 June 2004 in respect of further capital expenditure, total
R441,5 million (2003: R342,3 million) and these will be incurred on current and
additional enhancement projects. These projects will include the completion of
the Nchwaning shaft complex, the construction of the underground mine at
Dwarsrivier Chrome Mine to replace the existing opencast mine and the
development of exploitable reserves in the North at the iron ore division
adjacent to Sishen Mine. This expenditure will be funded from internally
generated cash and available borrowing resources.
BORROWINGS
Interest bearing borrowings, which mainly concern Assmang, increased from R308,6
million to R379,2 million and are well within the group`s target levels.
BLACK ECONOMIC EMPOWERMENT
In May this year, the group announced its first black empowerment venture
involving the chrome mining operations of subsidiary company, Rustenburg
Minerals and the chromite arm of the Mankwe Development Foundation.
OUTLOOK
World crude steel production for the first half of calendar 2004 increased by
7,8% to 502,3 million tons. It is estimated that production should exceed one
billion tons by the end of calendar 2004 (2003: 965 million tons).
China continues to be the main contributor to the record production levels,
which are currently 21% above those at the first half of calendar 2003.
However, continuing constraints on railage and shipping capacity, particularly
through the ports of Saldanha Bay and Port Elizabeth, have left South African
producers, including Assmang, unable to achieve optimal benefits from the rise
in demand for manganese and iron ore resulting from the increase in global steel
production. As a result, sales volumes of iron ore and manganese ore were only
slightly higher than last year`s levels.
Recently, manganese alloy prices have reached unprecedentedly high levels due to
a combination of strong demand, the closure of a major French high carbon
ferromanganese producer and production cutbacks in China resulting from a
shortage of electric power. In Japan, US dollar prices for manganese ore for the
period April 2004 to March 2005 have increased on average by 16%. It is
anticipated that demand for manganese alloys will remain robust but that prices
could ease. However, high costs of coke, electricity and ocean freight should
ensure that prices remain above previous levels.
Global stainless steel production continued to show positive growth over the
year and the total production for calendar 2004 is likely to reach almost 24,0
million tons (2003: 22,5 million tons). The stronger Rand, together with low
ferrochrome stocks worldwide and the same cost factors affecting manganese
alloys, resulted in US dollar prices for charge chrome rising about 75% over the
past year.
International demand for the group`s products remains buoyant and volumes are
expected to approximate those of the year under review. US dollar prices for the
group`s products are expected to be higher than those achieved in the past
financial year. As in the past, earnings growth will be largely dependent upon
the Rand/US dollar exchange rate and upon cost savings generated at the
operating levels.
DIVIDENDS
An interim dividend of 20 cents (2003: 25 cents) per share was declared and paid
during the year and as reported in this announcement a final dividend of 45
cents (2003: 25 cents) per share was declared to shareholders on 1 September
2004 reflecting the stronger results achieved in the second half of the year.
The final dividend is not included in these results in accordance with the
group`s accounting policies for dividends.
ACCOUNTING POLICIES
The financial information included in this announcement has been prepared in
accordance with Statements of Generally Accepted Accounting Practice in South
Africa and the accounting policies used are consistent with those used in the
previous year.
AUDIT REVIEW
The year end results have been reviewed in terms of Rule 3.22 of the Listings
Requirements of the JSE Securities Exchange South Africa by the group`s auditors
Ernst & Young and their unqualified review opinion is available for inspection
at the registered office of the company.
Registered office:
Assore House
15 Fricker Road
Illovo Boulevard
Johannesburg 2196
Assore Limited
Company registration number: 1950/037394/06
Share code: ASR ISIN: ZAE000017117
Transfer office:
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Company secretaries:
African Mining and Trust Company Limited
Directors
Executive:
Desmond Sacco (Chairman)
R J Carpenter (Deputy Chairman)
C J Cory (Chief Executive Officer)
P C Crous (Technical and Operations)
Non-executive:
P N Boynton
B M Hawksworth
Dr J C van der Horst
Alternate:
J W Lewis (British)
Date: 01/09/2004 05:00:17 PM Produced by the JSE SENS Department
