| Wed 15 Mar 2006, 17:23 | | Assore Limited - Interim Results For The Half-Year |
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ASR
ASR
Assore Limited - Interim Results For The Half-Year Ended 31 December 2005
ASSORE LIMITED
Company registration number: 1950/037394/06
Share code: ASR
ISIN: ZAE000017117
("the company" or "the group")
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005
HIGHLIGHTS
* Attributable earnings for the half-year decreased from R199,8 million to
R146,7 million
* Interim dividend increased from R0,50 to R0,80 per share
* 15,02% BEE deal concluded and implemented
* Interest in Assmang increased to 50% following offer to minorities
CONSOLIDATED INCOME STATEMENT
Half-year ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
R"000 R"000 R"000
Turnover 1 410 131 1 342 874 3 093 944
Cost of sales (1 126 013) (1 000 573) (2 317 628)
Gross profit 284 118 342 301 776 316
Other income 61 748 58 920 196 514
Other expenses (94 529) (68 870) (157 501)
Finance costs (10 495) (15 316) (21 721)
Profit before taxation 240 842 317 035 793 608
Income tax expense (85 462) (101 959) (252 546)
Profit for the period 155 380 215 076 541 062
Earnings attributable to:
Equity holders of the parent 146 670 199 787 509 445
Minority interests 8 710 15 289 31 617
155 380 215 076 541 062
Earnings per share (cents) 523,8 713,5 1 819,4
Headline earnings per share (cents)* 523,5 698,1 1 833,7
Dividends per share (cents)
- Dividend paid in October 2005/2004 150 45 95
* Determination of headline earnings
Attributable earnings per
income statement as above 146 670 199 787 509 445
Net (profit)/loss on disposal
of assets (82) (4 318) 4 000
Headline earnings 146 588 195 469 513 445
Ordinary shares in issue (million) 28,0 28,0 28,0
Net asset value per share (Rand) 82,7 63,7 76,1
Capital expenditure (R million) 159,5 140,4 337,9
Capital commitments (R million) 195,4 178,5 218,2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Half-year ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
R"000 R"000 R"000
SHARE CAPITAL AND RESERVES
Balance at beginning of period 99 579 39 012 39 012
Net increase in the market value
of listed investments 95 243 22 031 66 500
Deferred taxation on changes in
market value of listed investments (9 411) (2 730) (9 410)
Foreign currency translation reserve (792) (165) 3 477
Balance at end of period 184 619 58 148 99 579
RETAINED INCOME
Balance at beginning of year 1 993 142 1 510 297 1 510 297
Attributable earnings for period
as above 146 670 199 787 509 445
Ordinary dividends paid
No 97 aggregating R1,50 per share
(2004: 45 cents per share) (42 000) (12 600) (26 600)
Balance at end of period 2 097 812 1 697 484 1 993 142
PER BALANCE SHEET 2 282 431 1 755 632 2 092 721
CONSOLIDATED CASH FLOW STATEMENT
Half-year ended Year ended
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
R"000 R"000 R"000
Cash generated from operations 67 745 234 049 638 730
Cash utilised in investing
activities (160 867) (130 841) (336 535)
Cash generated by/(utilised in)
financing activities 21 292 (91 288) (192 892)
(Decrease)/increase in cash for
period (71 830) 11 920 109 303
Cash resources at beginning of
period 275 566 166 263 166 263
CASH RESOURCES PER BALANCE SHEET 203 736 178 183 275 566
CONSOLIDATED BALANCE SHEET
At At At
31 December 31 December 30 June
2005 2004 2005
Unaudited Unaudited Audited
R"000 R"000 R"000
ASSETS
Non-current assets
Property, plant, equipment and
intangible assets 1 480 683 1 280 682 1 391 931
Long-term loans receivable 2 693 - -
Environmental rehabilitation
trust funds 17 694 13 694 17 493
Investments 332 481 188 258 232 093
Total non-current assets 1 833 551 1 482 634 1 641 517
Current assets
Inventories 794 450 644 399 695 600
Trade and other receivables 475 294 409 049 624 169
Cash resources 203 736 178 183 275 566
Total current assets 1 473 480 1 231 631 1 595 335
TOTAL ASSETS 3 307 031 2 714 265 3 236 852
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders" interest 2 282 431 1 755 632 2 092 721
Outside shareholders" interest 33 029 28 347 39 363
Total equity 2 315 460 1 783 979 2 132 084
Non-current liabilities
Deferred taxation 387 665 284 139 345 181
Long-term liabilities 62 708 58 507 65 333
Total non-current liabilities 450 373 342 646 410 514
Current liabilities
Interest bearing 265 009 317 222 226 740
Non-interest bearing 276 189 270 418 467 514
Total current liabilities 541 198 587 640 694 254
TOTAL EQUITY AND LIABILITIES 3 307 031 2 714 265 3 236 852
DECLARATION OF INTERIM DIVIDEND
Interim dividend No. 98 of 80 cents per share was declared on 15 March 2006.
The dividend has been declared in the currency of the Republic of South Africa.
In accordance with STRATE, the following dates apply to the interim dividend:
The last date to trade to qualify for the dividend (and for changes of address
or dividend instructions) will be Friday, 31 March 2006.
The company"s ordinary shares will commence trading "ex" the dividend from the
commencement of business on Monday, 3 April 2006.
The record date will be Friday, 7 April 2006.
Dividend cheques in payment of this dividend to holders of certificated shares
will be posted on or about Monday, 10 April 2006. 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, 10 April 2006.
Share certificates may not be dematerialised or rematerialised between Monday,
3 April 2006 and Friday, 7 April 2006, both days inclusive.
On behalf of the board
Desmond Sacco C J Cory
Chairman Chief Executive Officer
Johannesburg
15 March 2006
COMMENTARY
RESULTS
Attributable earnings for the six months ended 31 December 2005 were R146,7
million, a decrease of 26,6% on the equivalent period for the previous year of
R199,8 million. The decrease, which is in line with the trading update released
on SENS on 14 February 2006, is attributable to a 24% decrease in the earnings
for the period of Assmang Limited ("Assmang") which Assore controls jointly
with African Rainbow Minerals Limited ("ARM") and is proportionately
consolidated in accordance with the group"s accounting policies.
Assmang"s results for the half-year were affected by recent negative market
conditions for manganese ore, ferromanganese and charge chrome which have
resulted in lower market prices and lower sales volumes for certain products.
SALES VOLUMES
Sales volumes for the period under review are set out in the table below:
Six months ended %
31 December Volume
2005 2004 increase/
(tons) (tons) (decrease)
Iron ore 2 599 779 2 540 595 2,3
Manganese ore* 573 407 767 986 (25,3)
Manganese alloys 129 512 105 272 23,0
Charge chrome 89 064 104 371 (14,7)
Chrome ore* 242 264 240 260 0,8
* Excluding intra-group sales.
CAPITAL EXPENDITURE
Assmang continued its capital expenditure programme, spending R313 million
(2004 : R286 million) during the period under review. Of this, R43 million was
spent on the completion of the Dwarsrivier underground chrome mine, which
commenced production well ahead of schedule and under budget, at a total
capital cost of R187 million.
During the period under review, the board of Assmang approved the first
construction phase of a new export iron ore mine on its Bruce, King and
Mokaning properties ("the Khumani Iron ore mine"), adjacent to Kumba"s Sishen
mine, near Kathu in the Northern Cape Province.
Construction of the Khumani mine commenced during the early part of calendar
2006 with the first phase resulting in a new 8,4 million ton per annum export
iron ore mine at an estimated total capital cost of R3,2 billion, excluding
capitalised interest. First production is expected during the first half of
calendar 2008.
Subject to Assmang Board approval, a second expansion phase of the Khumani
mine, to increase production volumes from the initial 8,4 million tons per
annum to 16,0 million tons per annum export capacity, forms part of the current
design and incorporates some of the capital required for the first phase. A
further estimated R1,8 billion will be required to complete the second phase
expansion to increase the capacity to 16,0 million tons per annum export
capacity. This second phase expansion is, however, dependent on further
increases in the capacity of Transnet"s Sishen/Saldanha export rail channel.
OUTLOOK
For the next six months Chinese demand for commodities will remain the biggest
global influence on volumes and prices for the group"s products. The price for
iron ore is expected to improve, but manganese ore prices have come under
pressure and are declining. At present, prices for manganese alloys are stable
but these could be impacted by the lower manganese ore price. Charge chrome
remains the weakest of the group"s products but the price is expected to
improve marginally during the last quarter of the financial year. However, the
Rand/US Dollar exchange rate will continue to be an important factor in
determining earnings.
DIVIDENDS
The results in this announcement include the final dividend of 150 cents (2004:
45 cents) per share which was declared on 30 August 2005 and paid to
shareholders on 3 October 2005.
Included in this announcement is the declaration of an increased interim
dividend of 80 cents (2005: 50 cents) per share which will be paid to
shareholders on or about Monday, 10 April 2006. As it has not yet been paid,
this dividend is not included in the results in accordance with the group"s
accounting policy for dividends.
ACCOUNTING POLICIES
The financial information included in this announcement has been prepared in
accordance with International Financial Reporting Standards ("IFRS"). This is
consistent with the basis used in the previous reporting period, except for
IAS 16 regarding property, plant and equipment and IAS 21 regarding the effects
of changes in foreign exchange rates which were adopted with effect from 1 July
2005 but had no material effect on the results for the period under review.
POST-BALANCE SHEET EVENTS
In November 2005 shareholders were advised by circular that, subject to certain
conditions precedent:
1 Assore had made an offer to the minority shareholders of Assmang in terms of
a scheme of arrangement which, if successful, would result in Assore
increasing its interest to 50% of the ordinary share capital of Assmang and
the subsequent delisting of Assmang from the JSE Limited;
2 Assore had finalised a black economic empowerment ("BEE") transaction which
would facilitate the acquisition of 15,02% of the company"s shares by Shanduka
Resources (Proprietary) Limited, a black owned and managed investment company
(11,76%) and the Bokomoso Trust (3,26%), a community trust established for
the benefit of broad-based community groupings in the areas in which the
group"s mines and beneficiation plants are located.
Subsequent to the half-year end, both these transactions became unconditional
in accordance with the terms and provisions set out in their respective
circulars and have been put into effect.
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)
Registered office:
Assore House
15 Fricker Road
IIlovo Boulevard
Johannesburg 2196
Transfer office:
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Company secretaries
African Mining and Trust Company Limited
Date: 15/03/2006 05:23:47 PM Produced by the JSE SENS Department
