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ASSORE LIMITED - INTERIM RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2003
ASSORE LIMITED
Company registration number: 1950/037394/06
Share code: ASR ISIN: ZAE000017117
INTERIM RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2003
* Increased sales volumes for all products
* Headline earnings decrease by 71,1% to R23,7 million due to stronger
exchange rates
* Increased US dollar prices expected for second half
CONSOLIDATED INCOME STATEMENT
Half Half
year ended year ended Year ended
31 December 31 December 30 June
2003 2002 2003
Unaudited Unaudited Audited
R"000 R"000 R"000
Turnover 854 474 855 807 1 753 027
Net operating profit 72 141 146 486 240 820
Finance costs (27 098) (20 411) (28 412)
Dividends received 1 957 2 605 5 451
Net profit before taxation 47 000 128 680 217 859
Taxation (18 317) (44 781) (76 414)
Net profit from ordinary
operating activities 28 683 83 899 141 445
Outside shareholders" share of
net profit (4 882) (1 755) (5 073)
Attributable earnings transferred
to statement of changes in equity 23 801 82 144 136 372
Earnings per share (cents) 85,0 293,4 487,0
Headline earnings per share (cents)* 84,6 292,7 482,7
Dividends per share (cents)
- Interim dividend declared
in March 2004/2003 20 25 25
- Final dividend paid
in October 2003/2002 25 40 25
*Determination of headline earnings
Attributable earnings per income
statement as above 23 801 82 144 136 372
Net profit on disposal or
impairment of assets (125) (197) (1 215)
Headline earnings 23 676 81 947 135 157
Ordinary shares in issue (million) 28,0 28,0 28,0
Net asset value per share (rand) 51,5 48,7 49,8
Capital expenditure (R million) 101,5 70,0 174,4
Capital commitments (R million) 189,7 383,6 171,9
CONSOLIDATED BALANCE SHEET
At 31 December At 31 December At 30 June
2003 2002 2003
Unaudited Unaudited Audited
R"000 R"000 R"000
ASSETS
Non-current assets
Property, plant, equipment
and intangible assets 1 116 817 990 256 1 056 281
Environmental rehabilitation
trust funds 12 884 13 341 12 547
Listed investments 183 304 150 349 147 152
1 313 005 1 153 946 1 215 980
Current assets
Inventories 558 145 548 019 469 132
Trade and other receivables 324 482 320 152 358 209
Cash resources 133 460 82 598 96 623
1 016 087 950 769 923 964
TOTAL ASSETS 2 329 092 2 104 715 2 139 944
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders" interest 1 428 137 1 351 131 1 382 513
Outside shareholders" interest 13 484 13 222 12 701
Share capital and reserves 1 441 621 1 364 353 1 395 214
Non-current liabilities
Deferred taxation 227 229 185 042 198 251
Long-term liabilities 35 360 33 037 34 865
262 589 218 079 233 116
Current liabilities
Interest bearing 424 744 415 467 308 622
Non-interest bearing 200 138 106 816 202 992
624 882 522 283 511 614
TOTAL EQUITY AND LIABILITIES 2 329 092 2 104 715 2 139 944
STATEMENT OF CHANGES IN EQUITY
Half Half
year ended year ended Year ended
31 December 31 December 30 June
2003 2002 2003
Unaudited Unaudited Audited
R"000 R"000 R"000
SHARE CAPITAL AND NON-
DISTRIBUTABLE RESERVES
Balance at beginning of period 29 459 90 138 90 138
Net increase/(decrease) in the
market value of listed investments 36 152 (44 032) (59 976)
Deferred taxation on changes in
market value of listed investments (5 484) 1 623 3 954
Foreign currency translation reserve (1 845) (2 424) (4 657)
Balance at end of period 58 282 45 305 29 459
DISTRIBUTABLE RESERVES
RETAINED INCOME
Balance at beginning of period 1 353 054 1 234 882 1 234
882
Attributable earnings for period 23 801 82 144 136 372
Ordinary dividends paid
No. 93 aggregating 25 cents
per share (2002: 40 cents per share) (7 000) (11 200) (18 200)
Balance at end of period 1 369 855 1 305 826 1 353 054
PER BALANCE SHEET 1 428 137 1 351 131 1 382 513
CONSOLIDATED CASH FLOW STATEMENT
Half Half
year ended year ended Year ended
31 December 31 December 30 June
2003 2002 2003
Unaudited Unaudited Audited
R"000 R"000 R"000
Cash generated from operations 22 391 21 382 257 031
Cash utilised in investing activities (101 675) (85 195) (198 276)
Cash generated by/(utilised in)
financing activities 116 121 61 778 (46 765)
Increase/(decrease) in cash for period 36 837 (2 035) 11 990
Cash resources at beginning of period 96 623 84 633 84 633
CASH RESOURCES
PER BALANCE SHEET 133 460 82 598 96 623
DECLARATION OF INTERIM DIVIDEND
Interim dividend No. 94 of 20 cents per share was declared on Tuesday, 9 March
2004.
The last date to trade "cum" dividend
in order to participate in the dividend
will be Thursday, 1 April 2004.
The company"s ordinary shares will
commence trading "ex" dividend from the
commencement of business on Friday, 2 April 2004
and the record date will be Thursday, 8 April 2004.
Share certificates may not be dematerialised or rematerialised between Friday, 2
April 2004 and Thursday, 8 April 2004 (inclusive of both days) and the dividend
is payable on Tuesday, 13 April 2004.
On behalf of the board
Desmond Sacco R J Carpenter
Chairman Deputy Chairman
Johannesburg
9 March 2004
COMMENTARY
Results
In spite of increased tonnages in all the Group"s products, earnings for the six
months were 71% lower than the corresponding period of the previous year, mainly
due to the significantly lower contribution from the Group"s 45,7% interest in
Assmang Limited ("Assmang"). The results of Assmang for the half-year ended 31
December 2003 were published on 20 February 2004 and reflected a 97% decrease in
earnings for the period. The decrease in earnings was attributable directly to
the stronger Rand exchange rate during the period and both Assore and Assmang
issued trading statements in November 2003 to this effect.
Sales tonnages were higher for all products as indicated in the table below and
higher US dollar prices were achieved for certain ferro-alloy products during
the period. However, the stronger sales performance was unable to counteract the
significant strengthening of the Rand which occurred during the period and which
has affected most other resource companies operating in South Africa. Most
products are priced in US dollars and the average Rand exchange rate realised
during the period was R6,98 to the US dollar compared to R10,02 in the
corresponding period of the previous year.
This change seriously affected earnings which reduced to R23,8 million (2002:
R82,1 million), while commission income, which is based on revenue received,
remained relatively constant due to the higher tonnages.
Sales volumes
Half year ended 31 December
2003 2002 Volume
(tons) (tons) increase
Manganese ore 662 867 409 443 62%
Iron ore 2 493 824 2 259 433 10%
Manganese alloys 100 489 96 908 4%
Charge chrome 126 860 103 641 22%
Capital expenditure
Assmang continued its significant capital programme during the period under
review, spending R208,1 million (2002: R139,6 million), of which R77,0 million
was spent on the new shaft complex at the Nchwaning manganese mine. Production
from this shaft is expected to commence during May 2004 and capital expenditure
will be substantially completed by December 2004. Planned production levels from
the existing and new Nchwaning shaft complex are adequate to satisfy customer
demand within current logistical constraints. The cost of the development of the
shaft complex is estimated at R690 million.
Current additional enhancement projects at Assmang 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 development of
additional reserves at the iron ore division.
Outlook for the next six months
Demand for the Group"s products remains buoyant and tonnages over the balance of
the financial year are expected to approximate those of the period under review.
US dollar prices for the Group"s products are also expected to be higher which,
given a stable exchange rate, could result in earnings increasing considerably
in the second half. However, shareholders are cautioned that earnings
performance will continue to be largely dependent upon Rand exchange rates and,
to a lesser extent, upon cost savings achieved by the operating divisions.
Dividends
The results include a final dividend of 25 cents (2002: 40 cents) per share with
regard to the previous financial year, which was paid on 13 October 2003.
With due regard for the lower earnings in the period and the exchange rate
uncertainty which could impact upon earnings over the remainder of the year, a
reduced interim dividend of 20 cents (2002: 25 cents) per share has been
declared, payable to shareholders on 13 April 2004.
Accounting policies
The results have been prepared in accordance with accounting standards issued by
the International Financial Reporting Standards Board and The South African
Institute of Chartered Accountants. The accounting standards are consistent with
those used previously.
Registered office: Transfer office:
Assore House Computershare Limited
15 Fricker Road Investor Services Division
IIlovo Boulevard 70 Marshall Street
Johannesburg 2196 Johannesburg 2001
Directors
Executive:
Desmond Sacco (Chairman), R J Carpenter (Deputy Chairman), C J Cory (Financial),
P C Crous (Technical)
Non-executive:
R A Chute, B M Hawksworth, Dr J C van der Horst
Alternate:
J W Lewis (British)
Company secretaries:
African Mining and Trust Company Limited
Date: 09/03/2004 10:00:06 AM Supplied by www.sharenet.co.za
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