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ASR - Assore Limited - Final results for the year ended 30 June 2007
Assore Limited
Company Registration Number: 1950/037394/06
Share code: ASR & ISIN: ZAE000017117
Final results
for the year ended 30 June 2007
*Higher US dollar prices and increased sales volumes for products
*Headline earnings increased by 127,2% to R736,0 million
*Final dividend increased from 150 cents to 200 cents per share
*Capacity of new Khumani Iron Ore Mine increased during the year from 8,4
to 10 million tons and construction on schedule
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
30 June 30 June
2007 2006
Reviewed Audited
R`000 R`000
Turnover 4 293 036 3 382 587
Cost of sales (3 174 247) (2 783 365)
Gross profit 1 118 789 599 222
Profit on disposal of available-for-sale
investments 43 025 145 777
Discount on BEE transaction - (35 752)
Other income 233 113 217 999
Other expenses (195 017) (204 571)
Finance costs (27 471) (15 284)
Profit before taxation and State`s share
of profits 1 172 439 707 391
Taxation and State`s share of profits (369 084) (227 569)
Profit for the year 803 355 479 822
Earnings attributable to:
Equity holders of the parent 774 704 457 384
Minority interests 28 651 22 438
Profit for the year 803 355 479 822
Earnings per share (cents) 2 863 1 652
Headline earnings per share (cents) * 2 720 1 170
Dividends per share paid during the year
(cents) 300 230
- Final 150 150
- Interim 150 80
* Determination of headline earnings per
share
Attributable earnings as above 774 704 457 384
Profit on disposal (net of tax) of:
- Available-for-sale investments (36 786) (129 085)
- Property, plant and equipment (1 897) (4 366)
Headline earnings 736 021 323 933
Weighted average number of ordinary
shares (million)
Ordinary shares in issue 28,00 28,00
Treasury shares (0,94) (0,30)
Weighted average ordinary shares 27,06 27,70
Net asset value per share (Rand) 121,4 93,3
Capital expenditure (R million) 1 173,2 389,9
Capital commitments (R million) 2 692,5 2 116,9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
30 June 30 June
2007 2006
Reviewed Audited
R`000 R`000
Share capital and reserves
Balance at beginning of year 53 438 99 579
Shares issued during the year - 55
Shares repurchased during the year - (55)
Net movements on share premium - 30 358
Net increase in the market value of
available-for-sale investments 76 791 6 508
Deferred capital gains taxation on
changes
in market value of available-for-sale
investments (7 566) (5 388)
Transfer to foreign currency translation
reserve 270 907
Re-purchace of treasury shares (7 736) (78 526)
Balance at end of year 115 197 53 438
Retained earnings
Balance at beginning of the year 2 421 878 1 993 142
Attributable profit for the year 774 704 457 384
Discount on BEE transaction - 35 752
Ordinary dividends paid
No. 99 and No. 100 aggregating R3,00 per
share (2006: R2,30 per share) (81 072) (64 400)
Balance at end of year 3 115 510 2 421 878
Per balance sheet 3 230 707 2 475 316
CONSOLIDATED BALANCE SHEET
At 30 June At 30 June
2007 2006
Reviewed Audited
R`000 R`000
Assets
Non-current assets
Property, plant and equipment, investment
properties and intangible assets 3 003 319 2 023 210
Available-for-sale investments 236 119 169 750
Total non-current assets 3 239 438 2 192 960
Current assets
Inventories 976 047 896 152
Trade and other receivables 798 519 648 021
Cash resources 309 457 171 835
Total current assets 2 084 023 1 716 008
Total assets 5 323 461 3 908 968
Equity and liabilities
Share capital and reserves
Ordinary shareholders` interest 3 230 707 2 475 316
Outside shareholders` interest 48 673 51 114
Total equity 3 279 380 2 526 430
Non-current liabilities
Deferred taxation 620 597 544 844
Long-term liabilities 156 955 122 312
Total non-current liabilities 777 552 667 156
Current liabilities
Interest-bearing 544 770 253 454
Non interest-bearing 721 759 461 928
Total current liabilities 1 266 529 715 382
Total equity and liabilities 5 323 461 3 908 968
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
30 June 30 June
2007 2006
Reviewed Audited
R`000 R`000
Cash generated from operations 1 005 432 469 973
Cash utilised in investing activities (1 144 954) (678 158)
Cash generated by financing activities 277 144 86 961
Increase/(decrease) in cash for the year 137 622 (121 224)
Cash resources at beginning of year 171 835 293 059
Cash resources per balance sheet 309 457 171 835
DECLARATION OF FINAL DIVIDEND
Final dividend No. 101 of 200 cents per share was declared on 29 August
2007, in the currency of the Republic of South Africa. In accordance with
STRATE, the following dates apply to the dividend declared:
The last date to trade to qualify for the dividend (and for changes of
address or dividend instructions) will be Friday, 14 September 2007.
The company`s ordinary shares will commence trading "ex" the dividend from
the commencement of business on Monday, 17 September 2007.
The record date will be Friday, 21 September 2007.
Dividend cheques in payment of this dividend to holders of certificated
shares will be posted on or about Tuesday, 25 September 2007. 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 Tuesday, 25
September 2007.
Share certificates may not be dematerialised or rematerialised between
Monday, 17 September 2007 and Friday, 21 September 2007, both days
inclusive.
On behalf of the board
Desmond Sacco C J Cory
Chairman Chief Executive Officer
Johannesburg
31 August 2007
COMMENTARY
Headline earnings for the year have increased by 127,2% to R736,0 million
due mainly to a significant increase in the earnings of Assmang Limited
(Assmang) and increased commissions received on sales of group products.
Assore holds a 50% interest in Assmang which is proportionately
consolidated in accordance with group accounting policies.
Assmang`s earnings for the year increased by 99,8% due to increased sales
volumes (refer table below) and increased US Dollar and Euro prices
achieved for all products driven by increased production of carbon and
stainless steels worldwide, but particularly in China. The results were
also enhanced by a weaker average exchange rate compared to the previous
year.
Attributable profit for the year increased by 69,4% to R774,7 million and
included profit before tax on the disposal of listed investments in the
previous year of R145,8 million compared to R43,0 million in the current
year which are disclosed separately in the income statement.
SALES VOLUMES
Assmang`s turnover for the year under review reached a record level of R6,1
billion (2006 : R4,4 billion) and sales volumes for all products were also
at record levels except for chrome ore which was marginally lower as
reflected in the table below:
Metric tons `000
2007 2006 % change
Iron ore 6 855 5 926 15,7
Manganese ore* 2 327 1 678 38,7
Manganese alloys 263 260 1,2
Charge chrome 232 210 10,5
Chrome ore* 172 178 (3,4)
* Excluding intra-group sales
CAPITAL EXPENDITURE
The bulk of the group`s capital expenditure occurs in Assmang which
amounted to R2,2 billion (2006: R705 million) during the period under
review. Of this R1,7 billion (comprising 42% of the total project capital)
was spent on the construction of the first phase of the new Khumani Iron
Ore Mine.
Construction of the 10 million ton per annum Khumani Iron Ore Mine at a
capital cost of R4 billion is on schedule to produce first tonnage for
export in the second quarter of 2008 as planned and total capital committed
to date amounted to R2,4 billion. The project will be funded from operating
cash flows and debt facilities at the Assmang level.
OUTLOOK
World carbon steel production continues to expand driven mainly by demand
from China which is resulting in increased demand for iron ore, manganese
ore and manganese alloys.
As a result, prices for manganese ore and manganese alloys continued to
strengthen and the annual contract price for iron ore is expected to
increase with effect from April 2008, which is the start of the new
contract year.
Production of stainless steel has shown strong growth propelled mainly by
China, resulting in strong demand for ferrochrome and chrome ore with
consequent higher prices. However stainless steel mills have recently
moderated production which could result in markets for ferrochrome being
oversupplied and the possibility of lower prices.
US Dollar and Euro exchange rates will continue to be an important factor
in the determination of earnings for the forthcoming year.
DIVIDENDS
The results in this announcement include the interim dividend of 150 cents
(2006: 80 cents) per share which was declared on 19 February 2007 and paid
to shareholders on 19 March 2007.
The Board has declared an increased final dividend of 200 cents (2006: 150
cents) making the total dividend for the year 350 cents (2006: 230 cents).
The final dividend will be paid to shareholders on or about 25 September
2007 and is not included in the results as it was declared after year end.
AUDIT REVIEW
Ernst & Young Inc., the group`s auditors, have reviewed the financial
results. A copy of their report is available for inspection at the
company`s registered office.
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial statements have been prepared on the historical cost basis,
in accordance with IAS34 - Interim Financial Reporting, except for
financial instruments that are fairly valued, in accordance with
International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board and incorporate accounting
policies which are consistent with those adopted in the financial year
ended 30 June 2006, except for the adoption of changes to IAS39, IFRS6,
IFRIC9 and IFRIC10. The adoption of these accounting policies has had no
impact on the financial statements.
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
M C Ramaphosa
Dr J C van der Horst
Alternate
J W Lewis (British)
P E Sacco
R Smith
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: 31/08/2007 13:42:01 Supplied by www.sharenet.co.za
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