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ASSORE LIMITED
FORMERLY THE ASSOCIATED ORE & METAL CORPORATION LIMITED
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 1999
AND FINAL DIVIDEND DECLARATION
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 30 JUNE
1999 1998
R000 R000
TURNOVER 820 213 752 377
NET OPERATING INCOME 194 959 131 333
DIVIDENDS RECEIVED 1 171 794
NET INCOME BEFORE TAXATION 196 130 132 127
TAXATION 63 075 49 596
DISTRIBUTABLE INCOME 133 055 82 531
DIVIDENDS 11 200 8 400
RETAINED INCOME FOR THE PERIOD 121 855 74 131
EARNINGS PER SHARE (CENTS) 475,2 294,8
DIVIDENDS PER SHARE (CENTS) 40,0 30,0
CONSOLIDATED BALANCE SHEET
AT 30 JUNE
1999 1998
R000 R000
CAPITAL EMPLOYED
SHARE CAPITAL 700 700
NON-DISTRIBUTABLE RESERVE 13 572 2 142
DISTRIBUTABLE RESERVE 529 064 407 209
LONG TERM LOANS 2 367 3 175
LONG TERM PROVISIONS 10 201 9 541
DEFERRED TAXATION 59 620 42 292
615 524 465 059
EMPLOYMENT OF CAPITAL
FIXED ASSETS 377 213 251 274
OTHER LISTED INVESTMENTS 50 834 43 473
CASH RESOURCES 101 864 82 666
OTHER CURRENT ASSETS 339 486 276 243
TOTAL ASSETS 869 397 653 656
CURRENT LIABILITIES
- INTEREST BEARING 138 862 84 721
- NON-INTEREST BEARING 115 011 103 876
615 524 465 059
ORDINARY SHARES IN ISSUE (MILLION) 28,0 28,0
NET ASSET VALUE PER SHARE (RAND) 22 16
CAPITAL EXPENDITURE 155,5 70,5
CAPITAL COMMITMENTS 118,6 54,4
COMMENT
WITH EFFECT FROM 1 JULY 1998 THE GROUP HAS CHANGED ITS BASIS OF ACCOUNTING FOR
ITS INVESTMENT IN THE ASSOCIATED MANGANESE MINES OF SOUTH AFRICA LIMITED
(ASSMANG) FROM THE EQUITY ACCOUNTING TO THE PROPORTIONATE CONSOLIDATION METHOD
IN LINE WITH THE REQUIREMENTS OF THE ACCOUNTING STATEMENT ON FINANCIAL
REPORTING OF INTERESTS IN JOINT VENTURES. WHILE THERE HAS BEEN NO CHANGE IN THE
LONG STANDING ARRANGEMENT BETWEEN ASSORE AND ANGLOVAAL MINING LIMITED WITH
REGARD TO THE JOINT CONTROL OF ASSMANG, THE BOARD IS OF THE OPINION THAT THE
PROPORTIONATE CONSOLIDATION METHOD IS A MORE APPROPRIATE REFLECTION OF THE
GROUP'S INVOLVEMENT IN ASSMANG, AND RESULTS IN IMPROVED FINANCIAL DISCLOSURE OF
THE GROUP'S INTEREST. THE EFFECT OF THE CHANGE ON THE GROUP'S EARNINGS FOR THE
YEAR WAS A DECREASE OF R1,0 MILLION (1998: R0,4 MILLION) HOWEVER, THE EFFECT ON
THE FINANCIAL STATEMENTS WAS SIGNIFICANT IN THAT THE GROUP IS NOW REFLECTING
ITS 45,4% INTEREST IN THE TURNOVER, ASSETS AND LIABILITIES OF THE ASSMANG GROUP
AND THE COMPARATIVES HAVE BEEN ADJUSTED ACCORDINGLY.
EARNINGS FOR THE YEAR ENDED 30 JUNE 1999 INCREASED BY 61,2% TO R133,0 MILLION
(R1998: R82,5 MILLION) ATTRIBUTABLE MAINLY TO A 9,0% INCREASE IN TURNOVER AND
THE IMPLEMENTATION OF STRINGENT COST CONTROL PROGRAMMES. THE INCREASE IN
TURNOVER WAS ALMOST ENTIRELY DUE TO THE SUDDEN AND SIGNIFICANT WEAKENING OF THE
DOLLAR/RAND EXCHANGE RATE IN THE MIDDLE OF THE FIRST HALF AS SALES VOLUMES FOR
THE YEAR WERE GENERALLY LOWER IN LINE WITH THE DEMAND FOR STEEL WORLDWIDE. THE
PRODUCTION OF STEEL REDUCED DURING THE YEAR UNDER REVIEW DUE MAINLY TO THE
FINANCIAL INSTABILITY WHICH DEVELOPED IN THE EAST TOWARDS THE END OF LAST YEAR.
SALES OF MANGANESE ORE, INCLUDING SALES TO FERALLOYS LIMITED'S CATO RIDGE
FACILITY REMAINED ALMOST CONSTANT AT 1,475 MILLION TONS
(1998: 1,501 MILLION TONS). HOWEVER, SALES OF IRON ORE DECLINED SIGNIFICANTLY
TO 3,981 MILLION TONS (1998: 5,124 MILLION TONS) IN LINE WITH LOWER ASIAN
CONSUMPTION. SALES OF FERROMANGANESE INCREASED TO
176 000 TONS (1998: 153 000 TONS) IN LINE WITH FORECAST, BUT SALES OF
FERROCHROME WERE LOWER AT 112 000 TONS (1998: 151 000 TONS) DUE TO THE WEAKNESS
WHICH PREVAILED IN THE WORLD FERROCHROME MARKET FOR ALMOST THE ENTIRE YEAR.
DURING THE YEAR UNDER REVIEW THE SOUTHERN EXTENSION OF THE BEESHOEK IRON ORE
MINE WAS COMMISSIONED, WHICH IS INTENDED TO BOOST IRON ORE EXPORTS TO 5,5
MILLION TONS BY YEAR 2001. SHORTLY AFTER THE END OF THE YEAR, ASSMANG ANNOUNCED
THAT IT WOULD PROCEED WITH VARIOUS LARGE PROJECTS WITHIN ITS CHROME AND
MANGANESE BUSINESSES. THE PROJECTS, ESTIMATED AT A CAPITAL COST OF ABOUT R1
BILLION OVER A FOUR YEAR PERIOD AND TO BE SELF-FUNDED BY THE GROUP, COMPRISE
VARIOUS DEVELOPMENTS TO THE GROUP'S EXISTING FERROCHROME BUSINESS AND AN
EXTENSION TO ITS NCHWANING MANGANESE MINE. SHAREHOLDERS ARE REFERRED TO THE
ANNOUNCEMENT OF ASSMANG'S RESULTS WHICH WAS PUBLISHED ON
20 AUGUST 1999 FOR DETAILS.
ALL GROUP COMPANIES HAVE IMPLEMENTED A STRATEGY TO ENSURE BUSINESS CONTINUITY
IS ACHIEVED INTO THE YEAR 2000. THE TOTAL COST OF THE PROJECT IS NOT EXPECTED
TO BE MATERIAL AND THERE IS NO REASON TO BELIEVE AT THIS STAGE THAT ANY
SIGNIFICANT INTERRUPTION SHOULD OCCUR TO BUSINESS OVER THIS PERIOD.
IN LINE WITH INCREASED EARNINGS AN INCREASED FINAL DIVIDEND OF 30 CENTS (1998:
20 CENTS) PER SHARE HAS BEEN DECLARED, WHICH TOGETHER WITH THE INTERIM DIVIDEND
OF 10 CENTS (1998: 10 CENTS) PER SHARE AMOUNTS TO A TOTAL DIVIDEND DECLARATION
FOR THE YEAR OF 40 CENTS (1998: 30 CENTS) PER SHARE.
DECLARATION OF FINAL DIVIDEND
FINAL DIVIDEND NO. 85 OF R0,30 PER SHARE IS DECLARED PAYABLE TO SHAREHOLDERS
REGISTERED IN THE BOOKS OF THE COMPANY AT CLOSE OF BUSINESS ON 23 SEPTEMBER
1999. THE TRANSFER BOOKS AND REGISTER WILL BE CLOSED FROM 24 SEPTEMBER TO 2
OCTOBER 1999, BOTH DAYS INCLUSIVE AND DIVIDEND WARRANTS WILL BE POSTED TO
SHAREHOLDERS ON OR ABOUT 4 OCTOBER 1999.
ON BEHALF OF THE BOARD
DESMOND SACCO R.J. CARPENTER
CHAIRMAN DEPUTY CHAIRMAN
JOHANNESBURG
6 SEPTEMBER 1999
REGISTERED OFFICE: ASSORE HOUSE, 6 ST ANDREWS ROAD, PARKTOWN, JOHANNESBURG 2193
TRANSFER SECRETARIES: COMPUTERSHARE SERVICES LIMITED, 41 FOX STREET,
JOHANNESBURG, 2001.
DIRECTORS: DESMOND SACCO (CHAIRMAN AND MANAGING DIRECTOR), R.J. CARPENTER
(DEPUTY CHAIRMAN), R.A. CHUTE, C.J. CORY, P.C. CROUS, B.M. HAWKSWORTH
ALTERNATE DIRECTOR: J.W. LEWIS (BRITISH).
ASSORE LIMITED
PRESS RELEASE
RESULTS FOR THE YEAR ENDED 30 JUNE 1999
ASSORE'S EARNINGS FOR THE YEAR ENDED 30 JUNE 1999 INCREASED BY 61,2% TO R133
MILLION (R1998: R82,5 MILLION) ATTRIBUTABLE MAINLY TO A 9% INCREASE IN TURNOVER
AND THE IMPLEMENTATION OF STRINGENT COST CONTROL PROGRAMMES. THE INCREASE IN
TURNOVER WAS ALMOST ENTIRELY DUE TO THE SUDDEN AND SIGNIFICANT WEAKENING OF THE
DOLLAR/RAND EXCHANGE RATE IN DIE MIDDLE OF THE FIRST HALF AS SALES VOLUMES FOR
THE YEAR WERE GENERALLY LOWER IN LINE WITH THE DEMAND FOR STEEL WORLDWIDE. THE
PRODUCTION OF STEEL REDUCED DURING THE YEAR UNDER REVIEW DUE MAINLY TO THE
FINANCIAL INSTABILITY WHICH DEVELOPED IN THE EAST TOWARDS THE END OF LAST YEAR.
EARNINGS ARE STATED AFTER A CHANGE IN THE BASIS OF ACCOUNTING FOR ASSORE'S
INVESTMENT IN THE ASSOCIATED MANGANESE MINES OF SOUTH AFRICA LIMITED (ASSMANG)
FROM THE EQUITY ACCOUNTING TO PROPORTIONATE CONSOLIDATION METHOD IN LINE WITH
THE REQUIREMENTS OF THE ACCOUNTING STATEMENT ON FINANCIAL REPORTING OF
INTERESTS IN JOINT VENTURES. WHILE THERE HAS BEEN NO CHANGE IN THE LONG
STANDING ARRANGEMENT BETWEEN ASSORE AND ANGLOVAAL MINING LIMITED WITH REGARD TO
THE JOINT CONTROL OF ASSMANG, THE BOARD IS OF THE OPINION THAT THE
PROPORTIONATE CONSOLIDATION METHOD IS A MORE APPROPRIATE REFLECTION OF THE
GROUP'S INVOLVEMENT IN ASSMANG AND RESULTS IN IMPROVED FINANCIAL DISCLOSURE OF
THE GROUPS INTEREST. THE EFFECT OF THE CHANGE ON THE GROUP'S EARNINGS FOR THE
YEAR WAS A DECREASE OF R1 MILLION (1998: R0,4 MILLION) HOWEVER THE EFFECT ON
THE FINANCIAL STATEMENTS WAS SIGNIFICANT IN THAT THE GROUP IS NOW REFLECTING
ITS 45,4% INTEREST IN THE TURNOVER, ASSETS AND LIABILITIES OF THE ASSMANG GROUP
AND THE COMPARATIVES HAVE BEEN ADJUSTED ACCORDINGLY.
SALES OF MANGANESE ORE, INCLUDING SALES TO FERRALLOYS LIMITED'S CATO RIDGE
FACILITY, REMAINED ALMOST CONSTANT AT 1,475 MILLION TONS (1998: 1,501 MILLION
TONS). HOWEVER, SALES OF IRON ORE DECLINED SIGNIFICANTLY TO 3,981 MILLIONS TONS
(1998: 5,124 MILLION TONS) IN LINE WITH LOWER ASIAN CONSUMPTION. SALES OF
FERROMANGANESE INCREASED TO 176 000 TONS (1998: 153 000 TONS) IN LINE WITH
FORECAST, BUT SALES OF FERROCHROME WERE LOWER AT 112 000 TONS (1998: 151 000
TONS) DUE TO THE WEAKNESS WHICH PREVAILED IN THE WORLD FERROCHROME MARKET FOR
ALMOST THE ENTIRE YEAR.
DURING THE YEAR UNDER REVIEW THE SOUTHERN EXTENSION OF THE BEESHOEK IRON ORE
MINE WAS COMMISSIONED, WHICH IS INTENDED TO BOOST IRON ORE EXPORTS TO 5,5
MILLION TONS PER YEAR. SHORTLY AFTER THE END OF THE YEAR ASSMANG ANNOUNCED THAT
IT WOULD PROCEED WITH VARIOUS LARGE PROJECTS, ESTIMATED AT A CAPITAL COST OF
ABOUT R1 BILLION OVER A FOUR YEAR PERIOD AND TO BE SELF-FUNDED BY ASSMANG,
COMPRISING VARIOUS DEVELOPMENTS TO THE EXISTING FERROCHROME BUSINESS AND AN
EXTENSION TO ITS NCHWANING MANGANESE MINE.
FOLLOWING THE EVALUATION OF THE DWARSRIVER DEPOSIT ASSMANG HAS DECIDED TO
PROCEED WITH THE ESTABLISHMENT OF AN OPEN CAST CHROME MINE AND BENEFICIATION
PLAT ON THE PROPERTY NEAR STEELPOORT IN MPUMALANGA. THE DWARSRIVER DEPOSIT WAS
ACQUIRED FROM GOLDFIELDS OF SOUTH AFRICA LIMITED DURING AUGUST 1998 AND
REPORTED ON IN THE PREVIOUS YEAR. CAPITAL EXPENDITURE OF ABOUT R180 MILLION HAS
BEEN APPROVED FOR THIS PURPOSE AND INCLUDES THE UPGRADING OF THREE FURNACES AT
THE FERROCHROME DIVISION. AS A RESULT, THE CHARGE CHROME CAPACITY WILL INCREASE
FROM ABOUT 150 000 TONS PER ANNUM TO 175 000 TONS PER ANNUM BY JULY 2000.
THE ESTABLISHMENT OF A NEW SHAFT SYSTEM TO THE WEST OF THE CURRENT NCHWANING
HIGH GRADE MANGANESE MINE AT AN ESTIMATED COST OF R500 MILLION HAS ALSO BEEN
APPROVED. THE NEW SHAFT SYSTEM WOULD ENABLE THE COMPANY TO REDUCE WORKING COST
DUE TO GEOGRAPHICAL EXPANSION THE USE OF MORE ADVANCED MINING TECHNOLOGIES.
SITE ESTABLISHMENT HAS ALREADY COMMENCED AND FINAL COMMISSIONING IS EXPECTED
EARLY IN 2004.
IN LINE WITH INCREASED EARNINGS AN INCREASED FINAL DIVIDEND OF 30 CENTS (1998:
20 CENTS) PER SHARE HAS BEEN DECLARED WHICH TOGETHER WITH THE INTERIM DIVIDEND
OF 10 CENTS (1998: 10 CENTS) PER SHARE AMOUNTS TO A TOTAL DIVIDEND DECLARATION
1HR THE YEAR OF 40 CENTS (1998: 30 CENTS) PER SHARE.
CONTACTS:
RJ CARPENTER (DEPUTY CHAIRMAN) PHONE 484 7212
CJ CORY (GROUP FINANCIAL DIRECTOR) PHONE 484 7212
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