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ASR - Assore Limited - Interim Results for the half-year ended 31 December 2008
and dividend declaration
Assore Limited
(Incorporated in the Republic of South Africa)
Registration number 1950/037394/06
Share code: ASR
ISIN: ZAE000017117
("the Assore group")
Interim Results for the half-year ended 31 December 2008
Strong markets and record sales in first quarter
Headline earnings increased by more than 3,5 times to R2,98 billion
Interim dividend increased from 250 cents to 1 000 cents per share
Second half will be significantly affected by world economic downturn
Consolidated Income Statement
Half-year ended Year ended
31 December 31 December 30 June
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Turnover 6 387 524 2 965 965 9 158 937
Cost of sales (2 338 355) (1 989 074) (4 668 547)
Gross profit 4 049 169 976 891 4 490 390
Profit on disposal of available-
for-sale investments - 22 350 22 350
Other income 955 470 151 526 611 737
Other expenses (138 956) (95 790) (399 005)
Finance costs (189 517) (14 411) (38 016)
Profit before taxation and
State`s share of profits 4 676 166 1 040 566 4 687 456
Taxation and State`s share of
profits (1 642 159) (341 869) (1 509 091)
Profit for the period 3 034 007 698 697 3 178 365
Earnings attributable to:
Shareholders of the holding
company 2 980 574 670 926 3 069 522
Minority shareholders 53 433 27 771 108 843
Profit for the period (as
above) 3 034 007 698 697 3 178 365
Attributable earnings as above 2 980 574 670 926 3 069 522
Profit on disposal (net of tax)
of:
- Available-for-sale
investments - (19 110) (19 221)
- Property, plant and equipment (3 902) (191) 7 407
Headline earnings 2 976 672 651 625 3 057 708
Earnings per share (cents) 12 461 2 485 11 406
Headline earnings per share
(cents) 12 444 2 413 11 362
Dividends per share declared in
respect of the abovementioned
earnings (cents) 1 000 250 1 250
- Interim 1 000 250 250
- Final 1 000
Weighted average number of
ordinary shares for the period
(million)
Ordinary shares in issue 27,75 28,00 28,00
Treasury shares
- Held by group companies (2,92) (0,09) (0,18)
- Held by Bokamoso Trust (0,91) (0,91) (0,91)
Weighted average ordinary
shares for the period 23,92 27,00 26,91
Net asset value per share
(Rand) 279,0 145,7 175,9
Capital expenditure (R million) 806,8 823,6 1 537,0
Capital commitments (R million) 2 002,5 1 363,3 857,3
Consolidated Statement Of Changes In Equity
Half-year ended Year ended
31 December 31 December 30 June
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Share capital, share premium
and other reserves
Balance at beginning of period 389 173 201 459 201 459
Net (decrease)/increase in the
market value of
available-for-sale investments (298 676) 69 650 209 669
Deferred capital gains taxation
on changes in market value
of available-for-sale
investments 41 815 (9 408) (27 675)
Foreign currency translation
reserve arising
on consolidation 15 957 (1 389) 5 720
Balance at end of period 148 269 260 312 389 173
Treasury shares
Balance at beginning of period (2 341 725) (86 262) (86 262)
Treasury shares purchased
during the period (31 503) (27 407) (27 407)
Treasury shares warehoused - - (2 228 056)
Cancellation of treasury shares
- Value of shares cancelled 248 729 - -
- Costs of shares cancelled (786) - -
Balance at end of period (2 125 285) (113 669) (2 341 725)
Retained earnings
Balance at beginning of period 6 063 424 3 115 510 3 115 510
Attributable profit for the
period 2 980 574 670 926 3 069 522
Treasury shares repurchased and
cancelled during the period (248 729) - -
Ordinary dividends declared
No. 103 aggregating R10,00 per
share (2007: R2,00 per share) (240 063) (54 048) (121 608)
Balance at end of period 8 555 206 3 732 388 6 063 424
Per balance sheet 6 578 190 3 879 031 4 110 872
Consolidated Cash Flow Statement
Half-year ended Year ended
31 December 31 December 30 June
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash generated from operations 2 911 436 714 824 5 657 688
Cash utilised in investing
activities (905 399) (925 423) (3 823 406)
Cash (utilised)/generated by
financing activities (38 435) 205 136 (154 782)
Increase/(decrease) in cash for
the period 1 967 602 (5 463) 1 679 500
Cash resources at beginning of
period 1 988 957 309 457 309 457
Cash resources per balance
sheet 3 956 559 303 994 1 988 957
Consolidated Balance Sheet
At At At
31 December 31 December 30 June
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and equipment,
investment properties and
intangible assets 4 820 765 3 673 968 4 196 018
Available-for-sale investments 363 403 429 928 590 191
Total non-current assets 5 184 168 4 103 896 4 786 209
Current assets
Inventories 2 051 088 1 126 740 1 287 730
Trade and other receivables 2 131 131 981 427 1 998 542
Cash resources 3 956 559 303 994 1 988 957
Total current assets 8 138 778 2 412 161 5 275 229
Total assets 13 322 946 6 516 057 10 061 438
Equity and liabilities
Share capital and reserves
Ordinary shareholders` interest 6 578 190 3 879 031 4 110 872
Minority shareholders` interest 99 859 45 780 111 528
Total equity 6 678 049 3 924 811 4 222 400
Non-current liabilities
Deferred taxation 1 076 861 630 288 899 701
Long-term liabilities 232 085 273 349 223 320
Total non-current liabilities 1 308 946 903 637 1 123 021
Current liabilities
Interest-bearing 2 589 062 650 841 2 621 489
Non-interest bearing 2 746 889 1 036 768 2 094 528
Total current liabilities 5 335 951 1 687 609 4 716 017
Total equity and liabilities 13 322 946 6 516 057 10 061 438
Commentary
Headline earnings for the six months to 31 December 2008 have increased by 357%
to R2 976,7 million due to the significant increase in the earnings of Assmang
Limited (Assmang), and the increased commissions earned on the higher sales of
group products. Assore holds a 50% interest in Assmang, which is proportionately
consolidated in accordance with International Financial Reporting Standards
(IFRS).
Assmang`s headline earnings increased by 391% to R5 628 million compared to the
same period of the previous year, despite lower sales volumes for all products,
except for iron ore. The significant increase in earnings was attributable to
substantially higher US Dollar prices for all products and a weakening of the SA
Rand against the US Dollar, particularly in the second fiscal quarter. Markets
for all products were strong in the first fiscal quarter with prices and volumes
driven by increased production of carbon and stainless steels worldwide,
particularly in China. The second quarter saw a dramatic deterioration in market
conditions on the back of the current world economic turmoil, which has resulted
in decreased demand for all group products, except for iron ore, where export
volumes are largely unaffected, but prices have declined.
Sales Volumes
Assmang`s turnover for the period under review reached a record level of R10,9
billion (2007: R4,4 billion), however, with the exception of iron ore, sales
volumes for all products were lower compared to the same period for the previous
fiscal year, as shown in the table below:
2008 2007
M tons `000 M tons `000 % change
Iron ore 3 455 3 286 5
Manganese ore* 1 291 1 434 (10)
Manganese alloys* 70 122 (43)
Charge chrome 65 115 (43)
Chrome ore* 80 116 (31)
* Excluding intra-group sales
Capital Expenditure
The bulk of the group`s capital expenditure occurs in Assmang and is summarised
by division for the period under review as follows:
2008 2007
Rm Rm
Iron ore division 875 1 366
Manganese division 409 163
Chrome division 219 55
Total - Assmang 1 503 1 584
The major capital expenditure occurred in the iron ore and manganese divisions.
A total of R664 million was spent on infrastructural items at the new Khumani
Iron Ore Mine, with a further R126 million spent on housing in the iron ore
division. An amount of R140 million has been approved to rebuild furnace 6 at
Cato Ridge, of which R87 million has been spent to date. This furnace was
damaged in the unfortunate explosion that happened at the Works on 24 February
2008, but was recommissioned during October 2008.
It is expected that the feasibility study to expand Khumani`s annual capacity to
16 million tons will be complete by May 2009, while negotiations are being
finalised with Transnet to increase Assmang`s annual export allocation on the
Sishen/Saldanha line to 14 million tons per annum.
Outlook
Despite the increase in earnings compared to the same period in the previous
fiscal year, trading conditions have changed radically since the world economic
turmoil set in at the beginning of October 2008. Since the end of the period
under review these conditions have deteriorated further making it impossible to
determine the outlook for the second half with any certainty or to provide any
comment with regard to market recovery. Results of the group continue to be
significantly exposed to fluctuations in exchange rates and the bulk of the
group`s sales remain in the export market.
Dividends
The results in the announcement include the final dividend relating to the
previous financial year of 1 000 cents (2007: 200 cents) per share, which was
declared on 27 August 2008 and paid to shareholders on 22 September 2008. Based
on the increased earnings for the current period the board has declared an
interim dividend of 1 000 cents (2007: 250 cents) per share, which will be paid
to shareholders on or about 16 March 2009. In accordance with Generally Accepted
Accounting Practice, this interim dividend is not included in the results for
the period under review as it was declared after 31 December 2008.
Accounting policies and basis of preparation
The financial results for the period under review have been prepared on the
historical cost basis, except for financial instruments that are fairly valued,
in accordance with IAS 34 - Interim Reporting, issued by the International
Accounting Standards Board. The accounting policies applied are consistent with
those adopted in the financial year ended 30 June 2008, with the exception of
the adoption of the following policies in response to changes in IFRS:
- IAS 39 and IFRS 7 - Reclassification of Financial Assets -
Amendments to IAS 39 Financial Instruments: Recognition and
Measurement and IFRS 7 Financial Instruments: Disclosures
- IFRIC 12 - Service Concession Agreements
- IFRIC 13 - Customer Loyalty Programmes
- IFRIC 14 and IAS 19 - The limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction
The adoption of these amendments to standards and interpretations has had no
effect on the financial statements of the group except for the disclosure of
additional information.
Declaration of interim dividend
Interim dividend No. 104 of 1 000 cents per share was declared on 17 February
2009, in the currency of the Republic of South Africa. In accordance with
STRATE, the following dates apply to the dividend declared:
- The last trading date to qualify for the dividend (and for changes
of address or dividend instructions) will be Friday, 6 March 2009.
- The company`s ordinary shares will commence trading "ex dividend"
from the commencement of business on Monday, 9 March 2009.
- The record date will be Friday, 13 March 2009.
- Dividend cheques in payment of this dividend to holders of
certificated shares will be posted on or about Monday, 16 March
2009.
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, 16 March 2009.
Share certificates may not be dematerialised or rematerialised between Monday, 9
March 2009 and Friday, 13 March 2009, both days inclusive.
On behalf of the board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
19 February 2009
Registered office Transfer office Directors
Assore House Computershare Investor Executive
15 Fricker Road Services (Proprietary) Desmond Sacco
IIlovo Boulevard Limited (Chairman)
Johannesburg 2196 70 Marshall Street RJ Carpenter (Deputy
Johannesburg 2001 Chairman)
CJ Cory (Chief
Executive Officer)
PC Crous (Technical
and Operations)
Company secretaries Non-executive
African Mining and Trust Company Limited BM Hawksworth
MC Ramaphosa
EM Southey
Dr JC van der Horst
Assore Limited Alternate
Company Registration Number: 1950/037394/06 JW Lewis (British)
Share code: ASR ISIN: ZAE000017117 NG Sacco
PE Sacco
R Smith
www.assore.com
Date: 19/02/2009 14:00:02 Supplied by www.sharenet.co.za
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