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ASSORE LIMITED
REG. NO. 05/37394/06
GROUP RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 1999
AND INTERIM DIVIDEND DECLARATION
CONSOLIDATED INCOME STATEMENT
HALF YEAR ENDED YEAR ENDED
31 DECEMBER 30 JUNE
1999 1998 1999
R000 R000 R000
UNAUDITED UNAUDITED AUDITED
TURNOVER 372 534 381 457 820 213
NET OPERATING INCOME 40 460 105 828 194 959
DIVIDENDS RECEIVED 564 725 1 171
NET INCOME BEFORE TAXATION 41 024 106 553 196 130
TAXATION 16 445 42 361 63 075
NET INCOME 24 579 64 192 133 055
OUTSIDE SHAREHOLDERS'
INTEREST THEREIN 209 - -
ATTRIBUTABLE EARNINGS 24 370 64 192 133 055
DIVIDENDS 2 800 2 800 11 200
RETAINED INCOME FOR THE PERIOD 21 570 61 392 121 855
EARNINGS PER SHARE (CENTS) 87,0 229,3 475,2
DIVIDENDS PER SHARE (CENTS) 10,0 10,0 40,0
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER AT 30 JUNE
1999 1998 1999
R000 R000 R000
UNAUDITED UNAUDITED AUDITED
CAPITAL EMPLOYED
SHARE CAPITAL AND RESERVES 581 853 460 168 543 335
OUTSIDE SHAREHOLDERS INTEREST 9 119 - -
DEFERRED TAXATION 66 144 52 294 59 620
LONG-TERM PROVISIONS 13 082 10 114 10 201
LONG-TERM BORROWINGS 2 410 3 122 2 367
672 608 525 698 615 523
EMPLOYMENT OF CAPITAL
FIXED AND OTHER
NON-CURRENT ASSETS 425 369 352 269 377 212
LISTED INVESTMENTS 67 529 36 070 50 834
CASH RESOURCES 73 495 90 741 101 865
OTHER CURRENT ASSETS 471 728 322 657 339 486
TOTAL ASSETS 1 038 121 801 737 869 397
CURRENT LIABILITIES
- NON-INTEREST BEARING 117 254 144 891 115 012
- INTEREST BEARING 248 259 131 148 138 862
672 608 525 698 615 523
ORDINARY SHARES IN ISSUE (MILLION) 28,0 28,0 28,0
NET ASSET VALUE PER SHARE (RAND) 24 19 22
CAPITAL EXPENDITURE 61,7 119,3 155,4
CAPITAL COMMITMENTS 167,1 188,1 118,6
COMMENTS
ATTRIBUTABLE EARNINGS FOR THE HALF YEAR HAVE DECREASED BY 62,0% TO 87 CENTS PER
SHARE COMPARED WITH THE CORRESPONDING PERIOD OF THE PREVIOUS YEAR. THE DECREASE
IS ATTRIBUTABLE TO LOWER COMMISSIONS RECEIVED AND THE REDUCTION OF 71,9% IN THE
EARNINGS OF THE ASSOCIATED MANGANESE MINES OF SOUTH AFRICA ("ASSMANG") WHICH
ARE PROPORTIONATELY CONSOLIDATED IN THE FINANCIAL STATEMENTS. THE INTERIM
RESULTS OF ASSMANG WERE PUBLISHED ON 18 FEBRUARY 2000 AND SHAREHOLDERS ARE
REFERRED TO THE COMMENT CONTAINED THEREIN.
THE DECLINE IN EARNINGS HAS RESULTED MAINLY FROM THE RELATIVELY STRONG US
DOLLAR EXCHANGE RATE WHICH PREVAILED DURING THE PERIOD AND LOWER US DOLLAR
PRICES AND SALES VOLUMES OF MANGANESE ORE WHICH WERE CAUSED BY THE LOWER DEMAND
FOR STEEL, WORLD-WIDE. MANGANESE ORE SALES FOR THE PERIOD DECREASED BY 24% TO
567 000 TONS AND IRON ORE SALES INCREASED BY 10% TO 1 959 000 TONS. SALES OF
HIGH CARBON FERROMANGANESE DECREASED BY 16% TO 74 000 TONS AND FERROCHROME
SALES FOR THE HALF YEAR WERE MARGINALLY LOWER AT 49 000 TONS.
SUBSEQUENT TO THE HALF YEAR, THE US DOLLAR PRICES FOR FERROMANGANESE AND
FERROCHROME HAVE STRENGTHENED BUT RESULTS FOR THE SECOND HALF WILL DEPEND TO A
LARGE EXTENT ON THE US DOLLAR EXCHANGE RATE. WHILE RESULTS FOR THE SECOND HALF
ARE EXPECTED TO EXCEED THOSE OF THE FIRST IT IS ANTICIPATED THAT RESULTS FOR
THE YEAR WILL BE SIGNIFICANTLY LOWER THAN IN THE PREVIOUS YEAR.
IN VIEW OF THE GROUP'S CAPITAL EXPENDITURE COMMITMENTS, PARTICULARLY AT
ASSMANG, AN UNCHANGED INTERIM DIVIDEND OF 10 CENTS PER SHARE HAS BEEN DECLARED
FOR THE PERIOD.
DECLARATION OF INTERIM DIVIDEND
INTERIM DIVIDEND NO. 86 OF 10 CENTS PER SHARE WAS DECLARED PAYABLE TO
SHAREHOLDERS RECORDED IN THE REGISTER OF THE COMPANY AT THE CLOSE OF BUSINESS
ON 24 MARCH 2000. THE TRANSFER BOOKS AND REGISTER OF MEMBERS WILL BE CLOSED
FROM 25 MARCH 2000 TO 1 APRIL 2000, BOTH DAYS INCLUSIVE, AND DIVIDEND WARRANTS
WILL BE POSTED TO SHAREHOLDERS ON OR ABOUT 28 APRIL 2000.
ON BEHALF OF THE BOARD
DESMOND SACCO R.J. CARPENTER
CHAIRMAN DEPUTY CHAIRMAN
JOHANNESBURG
8 MARCH 2000
REGISTERED OFFICE: ASSORE HOUSE, 6 ST ANDREWS ROAD, PARKTOWN, JOHANNESBURG,
2193.
TRANSFER SECRETARIES: COMPUTERSHARE SERVICES LIMITED, 41 FOX STREET,
JOHANNESBURG, 2001.
COMPANY SECRETARIES: AFRICAN MINING AND TRUST COMPANY LIMITED.
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: J.W. LEWIS (BRITISH).
US$ EXCHANGE RATE AFFECTS ASSORE'S RESULTS
THE RECENTLY ANNOUNCED 72% REDUCTION IN THE EARNINGS OF ASSOCIATED MANGANESE
AND LOWER COMMISSIONS ON ORE SALES ARE PREDICTABLY THE KEY FACTORS IN REDUCING
ASSORE'S INTERIM EARNINGS BY 62% TO 87 CENTS A SHARE AT 31 DECEMBER 1999,
ANNOUNCED TODAY.
ASSORE PROPORTIONATELY CONSOLIDATES ITS 45,2% STAKE IN ASSMANG, WHICH IT
JOINTLY CONTROLS WITH AVMIN. ASSMANG'S RESULTS WERE PRIMARILY AFFECTED BY THE
STRENGTH OF THE U5 DOLLAR DURING THE PERIOD AND BY REDUCTIONS IN BOTH THE PRICE
AND THE VOLUME - THE LATTER BY 24% - OF MANGANESE SOLD, IN LINE WITH THE LOWER
INTERNATIONAL DEMAND FOR STEEL.
SALES OF IRON ORE ROSE BY 10% TO 1,96 MILLION TONS WHILE TONS WHILE OF THOSE OF
FERROMANGANESE DECREASED BY 16% TO 74 THOUSAND TONS. FERROCHROME SALES WERE
MARGINALLY DOWN AT 49 000 TONS.
IN THE CIRCUMSTANCES, TURNOVER WAS RELATIVELY WELL MAINTAINED AT R372,53
MILLION. HOWEVER, MARGINS WERE SHARPLY REDUCED WITH NET OPERATING INCOME
DECLINING BY ALMOST 62% TO R40,46 MILLION. TRADITIONALLY, MINING RESULTS
RESPOND SHARPLY - UP OR DOWN - TO MOVEMENTS IN THE PRICE OF THE UNDERLYING
MINERALS - A FUNCTION OF THE RELATIVELY FIXED OVERHEAD COST ELEMENT PER UNIT.
LAST YEAR, ASSMANQ ANNOUNCED SEVERAL LARGE NEW PROJECTS WITHIN ITS CHROME AND
MANGANESE WITH A COMBINED CAPITAL COST OF ALMOST R1 BILLION OVER A FOUR YEAR
PERIOD.
WORK HAS STARTED ON A OPEN-CAST CHROME MINE AND BENEFICIATION PLANT AT
DWARSRIVIER IN MPUMALANGA WHERE PRELIMINARY DRILLING HAS PROVED THAT A MINE
SUPPLYING METALLURGICAL GRADE ORES TO FERALLOYS IS VIABLE. LINKED TO THIS IS
THE UPGRADING OF THREE FURNACES TO INCREASE CAPACITY FROM 150 000 TO 175 000
TONS A YEAR AT FERALLOYS' FERROCHROME FACILITY AT MACHADADORP
A NEW SHAFT SYSTEM DUE FOR COMMISSIONING IN THE LATTER PART OF 2003 IS BEING
DEVELOPED AT THE NCHWANING MANGANESE MINE AT A COST OF APPROXIMATELY R500
MILLION. THIS WILL MEET THE ORE NEEDS AT NCHWANING WHERE RESERVES AT THE
EXISTING SHAFT AREA WILL BE DEPLETED WITHIN SIX YEARS, DUE TO A MAJOR FAULT
STRUCTURE DISPLACING THE DEPOSIT.
THESE PROJECTS WILL BE LARGELY SELF-FUNDED BY ASSMANG.
LOOKING AHEAD, ASSORE CHAIRMAN DESMOND SACCO EXPECTS SOME IMPROVEMENT IN THE
SECOND HALF RESULTS IN LINE WITH THE STRENGTHENING IN THE US DOLLAR PRICES FOR
FERROMANGANESE AND FERROCHROME. HOWEVER, HE CAUTIONS THAT THE US DOLLAR
EXCHANGE RATE WITH THE RAND WILL CONTINUE TO BE THE MAJOR DETERMINING FACTOR.
OVER THE YEAR AS A WHOLE, RESULTS ARE EXPECTED TO BE DOWN ON THOSE OF THE
PREVIOUS YEAR.
BEARING IN MIND THE GROUP'S CAPITAL EXPENDITURE COMMITMENTS - PARTICULARLY AT
ASSMANG - THE INTERIM DIVIDEND HAS BEEN MAINTAINED AT 10 CENTS A SHARE.
ENDS
FOR FURTHER INFORMATION, PLEASE CONTACT
DESMOND SACCO (011)4817600 / (011)4847212
SETON THOMPSON (031)2097611 / 082 897 9365
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