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ASR - Assore Limited - Final Results 2009 for the year ended 30 June 2009
Assore Limited
Company registration number: 1950/037394/06
Share code: ASR
ISIN: ZAE000017117
Final Results 2009 for the year ended 30 JUNE 2009
Record iron ore volumes but at lower prices
Assmang`s 10 million tons per annum Khumani Iron Ore Mine completed and
expansion project to 16 million tons per annum approved
Headline earnings increased by 6,8%
Dividends per share for fiscal year 2009 60% higher than 2008
Consolidated income statement
Year ended Year ended
30 June 30 June
2009 2008
Reviewed Audited
R`000 R`000
Turnover 8 818 655 9 158 937
Cost of sales (3 983 720) (4 668 547)
Gross profit 4 834 935 4 490 390
Profit on disposal of available-for-sale
investments 19 086 22 350
Other income 1 410 828 611 737
Other expenses (717 821) (399 005)
Finance costs (298 148) (38 016)
Profit before taxation and State`s share
of profits 5 248 880 4 687 456
Taxation and State`s share of profits (1 981 493) (1 509 091)
Profit for the year 3 267 387 3 178 365
Earnings attributable to:
Shareholders of the holding company 3 241 452 3 069 522
Minority interests 25 935 108 843
Profit for the year (as above) 3 267 387 3 178 365
Attributable earnings as above 3 241 452 3 069 522
(Profit)/loss on disposal (net of tax)
of:
- Available-for-sale investments (16 414) (19 221)
- Property, plant and equipment (18 359) 7 407
Impairment of non-financial assets 59 114 -
Headline earnings 3 265 793 3 057 708
Earnings per share (cents) (basic and
diluted) 13 669 11 406
Headline earnings per share (cents)
(basic and diluted) 13 772 11 362
Dividends per share declared in respect
of the abovementioned earnings (cents): 2 000 1 250
- Interim 1 000 250
- Final 1 000 1 000
Weighted average number of ordinary
shares (million)
Ordinary shares in issue 27,66 28,00
Weighted impact of treasury shares:
- Held by Group companies (3,03) (0,18)
- Held by Bokamoso Trust (0,91) (0,91)
Weighted average number of ordinary
shares 23,72 26,91
Net asset value per share (Rand) 278,9 175,9
Capital expenditure (R million) 1 459,5 1 537,0
Capital commitments (R million) 3 656,9 857,3
Consolidated statement of changes in equity
Year ended Year ended
30 June 30 June
2009 2008
Reviewed Audited
R`000 R`000
Share capital, share premium and other
reserves
Balance at beginning of year 389 173 201 459
Par value of shares repurchased and
cancelled (11) -
Net (decrease)/increase in the market
value of available-for-sale investments (289 229) 209 669
Deferred capital gains taxation on changes
in market value of available-for-sale
investments 40 492 (27 675)
Foreign currency translation reserve
arising on consolidation 11 337 5 720
Balance at end of year 151 762 389 173
Treasury shares
Balance at beginning of year (2 341 725) (86 262)
Treasury shares purchased during the year (31 503) (27 407)
Treasury shares warehoused - (2 228 056)
Cancellation of treasury shares
- Value of shares cancelled, excluding par
value 248 718 -
- Costs of shares cancelled (775) -
Balance at end of year (2 125 285) (2 341 725)
Retained earnings
Balance at beginning of year 6 063 424 3 115 510
Attributable profit for the year 3 241 452 3 069 522
Treasury shares repurchased and cancelled
during the year (248 718) -
Ordinary dividends declared during the
year Nos. 103 and 104 aggregating R20,00
per share (2008: R4,50 per share) (479 406) (121 608)
Balance at end of year 8 576 752 6 063 424
Per balance sheet 6 603 229 4 110 872
Consolidated balance sheet
At 30 June At 30 June
2009 2008
Reviewed Audited
R`000 R`000
Assets
Non-current assets
Property, plant and equipment, investment
properties and
intangible assets 5 183 450 4 196 018
Investments - Available-for-sale 415 066 590 066
- Other 42 259 125
Total non-current assets 5 640 775 4 786 209
Current assets
Inventories 1 804 010 1 287 730
Trade and other receivables 593 087 1 998 542
Cash resources 3 049 067 1 988 957
Total current assets 5 446 164 5 275 229
Total assets 11 086 939 10 061 438
Equity and liabilities
Share capital and reserves
Ordinary shareholders` interest 6 603 229 4 110 872
Minority shareholders` interest 71 819 111 528
Total equity 6 675 048 4 222 400
Non-current liabilities
Deferred taxation 1 341 836 899 701
Long-term liabilities 257 513 223 320
Total non-current liabilities 1 599 349 1 123 021
Current liabilities
Interest bearing 1 623 843 2 621 489
Non-interest bearing 1 188 699 2 094 528
Total current liabilities 2 812 542 4 716 017
Total equity and liabilities 11 086 939 10 061 438
Consolidated cash flow statement
Year ended Year ended
30 June 30 June
2009 2008
Reviewed Audited
R`000 R`000
Cash generated from operations 3 714 419 5 691 607
Cash utilised in investing activities (1 635 427) (3 857 325)
Cash utilised by financing activities (1 018 882) (154 782)
Increase in cash for the year 1 060 110 1 679 500
Cash resources at beginning of year 1 988 957 309 457
Cash resources per balance sheet 3 049 067 1 988 957
Commentary
Headline earnings for the fiscal year to 30 June 2009 have increased by 6,8% to
R3 266 million due to a rise in the earnings of Assmang Limited (Assmang), and
the increased commissions earned on the higher sales of Group products, mostly
occurring in the first fiscal quarter. 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 13% to R6 288 million compared to the
previous year, buoyed by record volumes of iron ore sales. The increase in
earnings was achieved despite the world economic turmoil, which set in at the
beginning of October 2008, and is largely attributable to a combination of
substantially higher US Dollar prices for all products in the first fiscal
quarter and weaker US Dollar/SA Rand exchange rates, prevalent in the second
fiscal quarter. Markets for all products were strong in the first 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, resulting in decreased demand for all group products, except for iron
ore, where export volumes are largely unaffected, but prices have declined. This
situation improved over the remainder of the year, specifically impacting upon
the level of spot transactions for manganese ore in the second half of the year.
Sales volumes and divisional contribution
Assmang`s turnover for the period under review reached a record level of R15,3
billion (2008: R14,8 billion). However, with the exception of iron ore which was
at record levels, sales volumes over the year were lower for all products due to
the world economic turmoil referred to above that set in from the second fiscal
quarter, as shown in the table below:
2009 2008
M tons `000 M tons `000 % change
Iron ore 7 409 6 581 13
Manganese ore* 2 152 3 711 (42)
Manganese alloys* 117 247 (53)
Charge chrome 144 275 (48)
Chrome ore* 256 304 (16)
* Excluding intra-group sales
The divisional contributions to headline earnings of Assmang for the year were
as follows:
2009 2008
Rm Rm % change
Iron ore division 2 160 780 177
Manganese division 3 915 4 087 (4)
Chrome division 213 683 (69)
Total - Assmang 6 288 5 550 13
Attributable to Assore 50% 3 144 2 775 13
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:
2009 2008
Rm Rm
Iron ore division 1 529 2 231
Manganese division 854 511
Chrome division 397 158
Total - Assmang 2 780 2 900
The major capital expenditure for the year occurred in the iron ore and
manganese divisions of Assmang.
A total of R924 million was spent on infrastructural items at the recently
commissioned Khumani Iron Ore Mine; R161 million was spent on the beneficiation
plant at the Nchwaning Manganese Mine and R63 million being spent at the
Dwarsrivier Chrome Ore Mine. Furnace rebuilding and emission reduction projects
totalling
R296 million were undertaken at Cato Ridge Works and at Machadadorp Works. Apart
from the expenditure in Assmang, R48 million has been spent on the development
of two underground shafts at the Rustenburg Chrome Ore Mine, which is 44% held
by a black economic empowerment partner for the benefit of historically
disadvantaged groups in the area surrounding the mining operations. The
estimated expenditure to complete this development is R60 million.
The feasibility study to expand Khumani`s annual capacity to 16 million tons per
annum has been completed, and R5,5 billion of additional capital has been
approved for this project, which will be funded from internally generated cash
flows and existing borrowing facilities. Commitment to increase Assmang`s annual
export allocation on the Sishen/Saldanha line to 14 million tons per annum has
been received from Transnet.
Outlook
Recent conditions in all markets have shown signs of improvement, with increased
sales prices being realised. However, it is too early to assess the
sustainability of these improvements. Therefore, it is not possible to estimate
the extent of the impact of these developments on Group earnings with reasonable
assurance or accuracy. Assmang`s 10 million tons Iron Ore Mine has been
completed and approval to increase capacity to 16 million tons per annum has
been granted. The Group`s performance continues to be significantly exposed to
fluctuations in exchange rates as the bulk of the Group`s sales remain in the
export market.
Dividends
The results in this announcement include the interim dividend of 1 000 cents
(2008: 250 cents) per share which was declared on 17 February 2009 and paid to
shareholders on 16 March 2009.
In line with the results for the year the Board has maintained a final dividend
of 1 000 cents making a total dividend for the year of 2 000 cents per share
(2008: 1 250 cents). The final dividend will be paid to shareholders on or about
21 September 2009 and is not included in the results as it was declared after
year-end.
Review by auditor
Ernst & Young Inc, the Group`s auditors, has reviewed the financial results
included in this announcement in accordance with ISRE 2410 - Review of Interim
Financial Information Performed by the Independent Auditor of the Entity, whose
unmodified report is available for inspection at the registered office of the
company.
Accounting policies and basis of preparation
The financial results included in this announcement are presented in terms of
IAS 34 - Interim Financial Reporting and have been prepared in accordance with
the principal accounting policies of the Group, which comply with IFRS and are
consistent with those applied in the previous year, with the exception of the
adoption of the following policies in response to changes in IFRS since the
previous year end:
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 11 - Group and Treasury Share Transactions
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 final dividend
Final dividend No. 105 of 1 000 cents per share was declared on 26 August 2009,
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, 11 September 2009.
The company`s ordinary shares will commence trading "ex dividend" from the
commencement of business on Monday, 14 September 2009.
The record date will be Friday, 18 September 2009.
Dividend cheques in payment of this dividend to holders of certificated shares
will be posted on or about Monday, 21 September 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, 21 September
2009.
Share certificates may not be dematerialised or rematerialised between Monday,
14 September 2009 and Friday, 18 September 2009, both days inclusive.
On behalf of the board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
27 August 2009
Registered office Transfer office Directors
Assore House Computershare Executive
Investor
15 Fricker Road Services (Pty) Desmond Sacco (Chairman)
Limited
IIlovo Boulevard 70 Marshall Street RJ Carpenter (Deputy
Chairman)
Johannesburg 2196 Johannesburg 2001 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: JW Lewis (British)
1950/037394/06
Share code: ASR ISIN: ZAE000017117 NG Sacco
PE Sacco
R Smith
www.assore.com
Date: 27/08/2009 15:50:01 Supplied by www.sharenet.co.za
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