Wrap Text
ASR - Assore - Interim Results for the half-year ended 31 December 2009
Assore Limited
Company registration number:
1950/037394/06
Share code: ASR ISIN: ZAE000017117
Assore Interim Results for the half-year ended 31 December 2009
Earnings decreased significantly due to market conditions
Interim dividend decreased from R10 to R5 per share
Assmang`s Khumani Expansion Project to 16 million tons per annum progressing
according to schedule
Markets showing strong signs of improvement
Consolidated income statement
Half-year ended Year ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Revenue 2 752 752 6 805 831 9 527 669
Turnover 2 550 160 6 387 524 8 818 655
Cost of sales (1 937 504) (2 338 355) (3 983 720)
Gross profit 612 656 4 049 169 4 834 935
Profit on disposal of
available-for-sale
investments - - 19 086
Other income 267 484 955 470 1 410 828
Other expenses (265 498) (138 956) (717 821)
Finance costs (61 760) (189 517) (298 148)
Profit before taxation and
State`s share of profits 552 882 4 676 166 5 248 880
Taxation and State`s share
of profits (211 085) (1 642 159) (1 981 493)
Profit for the period 341 797 3 034 007 3 267 387
Attributable to:
Shareholders of the holding
company 338 114 2 980 574 3 241 452
Non-controlling interests 3 683 53 433 25 935
Profit for the period (as
above) 341 797 3 034 007 3 267 387
Earnings as above 338 114 2 980 574 3 241 452
Profit on disposal (net of
tax) of:
- Available-for-sale
investments - - (16 414)
- Property, plant and
equipment (1 208) (3 902) (18 359)
Impairment of non-financial
assets - - 59 114
Headline earnings 336 906 2 976 672 3 265 793
Earnings per share (cents)
(basic and diluted) 1 413 12 461 13 669
Headline earnings per share
(cents)
(basic and diluted) 1 408 12 444 13 772
Dividends per share declared
in respect of the profit
for the period (cents): 500 1 000 2 000
- Interim 500 1 000 1 000
- Final 1 000
Weighted average number of
ordinary shares (million)
Ordinary shares in issue 27,57 27,75 27,66
Weighted impact of treasury
shares:
- Held by Group companies (2,73) (2,92) (3,03)
- Held by Bokamoso Trust (0,91) (0,91) (0,91)
23,93 23,92 23,72
Consolidated statement of comprehensive income
Half-year ended Year ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Profit for the period (as 341 797 3 034 007 3 267 387
above)
Other comprehensive
income/(loss) for the
period, net
of tax 178 759 (240 904) (237 400)
Net gain/(loss) on
revaluation of available-
for-sale investments to
market value 208 488 (298 676) (270 143)
Profit on disposal of
available-for-sale
investments recognised in
profit for the period - - (19 086)
Deferred capital gains
taxation (29 100) 41 815 40 492
178 759 (256 861) (248 737)
Exchange differences on
translation of
foreign operations (629) 15 957 11 337
Total comprehensive income
for the period, net of tax 520 556 2 793 103 3 029 987
Attributable to:
Shareholders of the holding
company 516 873 2 739 670 3 004 052
Non-controlling interests 3 683 53 433 25 935
As above 520 556 2 793 103 3 029 987
Consolidated cash flow statement
Half-year ended Year ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash generated from
operations 460 2 911 436 3 670 885
Cash utilised in investing
activities (699 305) (905 399) (1 620 690)
Cash utilised by financing
activities (102 950) (38 435) (990 085)
(Decrease)/increase in cash
for the period (801 795) 1 967 602 1 060 110
Cash resources at beginning
of period 3 049 067 1 988 957 1 988 957
Cash resources as per
statement of financial
position 2 247 272 3 956 559 3 049 067
Consolidated statement of financial position
At 31 At 31 At 30 June
December December
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and
equipment, investment
properties and intangible
assets 5 617 492 4 820 765 5 183 450
Investments - Available-for-
sale investments 644 346 363 278 415 066
- Other 42 663 36 706 42 259
Total non-current assets 6 304 501 5 220 749 5 640 775
Current assets
Inventories 1 868 563 2 051 088 1 804 010
Trade and other receivables 715 968 2 094 550 593 087
Cash resources 2 247 272 3 956 559 3 049 067
Total current assets 4 831 803 8 102 197 5 446 164
Total assets 11 136 304 13 322 946 11 086 939
Equity and liabilities
Share capital and reserves
Ordinary shareholders`
interest 6 880 759 6 578 190 6 603 229
Non-controlling interest 74 898 99 859 71 819
Total equity 6 955 657 6 678 049 6 675 048
Non-current liabilities
Net deferred taxation
liabilities 1 479 976 1 076 861 1 341 836
Long-term liabilities 253 706 232 085 257 513
Total non-current
liabilities 1 733 682 1 308 946 1 599 349
Current liabilities
Interest bearing 1 528 952 2 589 062 1 623 843
Non-interest bearing 918 013 2 746 889 1 188 699
Total current liabilities 2 446 965 5 335 951 2 812 542
Total equity and liabilities 11 136 304 13 322 946 11 086 939
Net asset value per share
(Rand) 290,6 279,0 278,9
Capital expenditure (R
million) 680,7 806,8 1 476,0
Capital commitments (R
million) 3 994,8 2 002,5 3 656,9
Consolidated statement of changes in equity
Half-year ended Year ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Share capital, share premium
and other reserves
Balance at beginning of
period 151 762 389 173 389 173
Par value of shares
repurchased and cancelled - (11) (11)
Other comprehensive
income/(loss) 178 759 (240 904) (237 400)
Balance at end of period 330 521 148 258 151 762
Treasury shares
Balance at beginning of
period (2 125 285) (2 341 725) (2 341 725)
Treasury shares repurchased
during the period - (26 465) (26 465)
Warehouse transaction costs - (5 038) (5 038)
Cancellation of treasury
shares repurchased
during the period
- Value of shares cancelled,
excluding par value - 248 718 248 718
- Costs of shares cancelled - (775) (775)
Balance at end of period (2 125 285) (2 125 285) (2 125 285)
Retained earnings
Balance at beginning of
period 8 576 752 6 063 424 6 063 424
Comprehensive income -
profit 338 114 2 980 574 3 241 452
Treasury shares repurchased
and cancelled during the
period - (248 718) (248 718)
Ordinary dividends declared
No. 105 at R10,00 per share
(2008: R10,00 per share) (239 343) (240 063) (479 406)
Balance at end of period 8 675 523 8 555 217 8 576 752
Ordinary shareholders`
equity 6 880 759 6 578 190 6 603 229
Non-controlling interest
Balance at beginning of
period 71 819 111 528 111 528
Total comprehensive income 3 683 53 433 25 935
Dividends paid to minorities (604) (65 102) (65 644)
Balance at end of period 74 898 99 859 71 819
Total equity 6 955 657 6 678 049 6 675 048
Segmental information
Joint venture mining and beneficiation
R`000 Iron ore Manganese Chrome Subtotal
Half-year ended 31
December 2009
Unaudited
Revenues
- third party 1 797 336 2 408 415 504 429 4 710 180
- intersegment - - - -
Total revenues 1 797 336 2 408 415 504 429 4 710 180
Contribution to
profit 383 314 355 240 (136 062) 602 492
Contribution to
headline earnings 382 525 355 240 (136 062) 601 703
Segment assets
6 969 701 7 750 518 1 852 285 16 572 504
Capital expenditure 777 424 375 571 135 146 1 288 141
Half-year ended 31
December 2008
Unaudited
Revenues
- third party 2 922 584 7 123 211 1 123 706 11 169 501
- intersegment - - - -
Total revenues 2 922 584 7 123 211 1 123 706 11 169 501
Contribution to
profit 1 542 485 3 641 162 453 849 5 637 496
Contribution to
headline earnings 1 531 885 3 641 826 453 849 5 627 560
Segment assets
5 706 277 11 668 590 2 338 530 19 713 397
Capital expenditure 874 771 409 434 219 412 1 503 617
Year ended 30 June
2009
Audited
Revenues
- third party 5 026 714 8 897 515 1 812 333 15 736 562
- intersegment - - - -
Total revenues 5 026 714 8 897 515 1 812 333 15 736 562
Contribution to
profit 2 170 428 3 955 584 193 146 6 319 158
Contribution to
headline earnings 2 159 878 3 926 926 213 344 6 300 148
Segment assets 6 504 050 8 348 952 2 038 210 16 891 212
Capital expenditure 1 529 176 853 983 396 616 2 779 775
Marketing Other mining Eliminations
and and and
R`000 shipping beneficiation adjustments* Consolidated
Half-year ended
31 December
2009
Unaudited
Revenues
- third party 242 449 79 855 (2 279 732) 2 752 752
- intersegment 153 806 - (153 806) -
Total revenues 396 255 79 855 (2 433 538) 2 752 752
Contribution to
profit 71 963 (25 175) (307 483) 341 797
Contribution to
headline
earnings 65 185 (22 893) (307 089) 336 906
Segment assets 5 647 818 2 989 583 (14 073 601) 11 136 304
Capital
expenditure 2 575 34 020 (644 071) 680 665
Half-year ended
31 December
2008
Unaudited
Revenues
- third party 805 271 231 253 (5 400 194) 6 805 831
- intersegment 377 020 2 800 (379 820) -
Total revenues 1 182 291 234 053 (5 780 014) 6 805 831
Contribution to
profit 137 241 84 254 (2 824 984) 3 034 007
Contribution to
headline
earnings 123 118 43 011 (2 817 017) 2 976 672
Segment assets 6 645 966 2 285 290 (15 321 707) 13 322 946
Capital
expenditure 5 391 49 638 (751 809) 806 837
Year ended 30
June 2009
Audited
Revenues
- third party 1 120 715 305 623 (7 635 231) 9 527 669
- intersegment 513 336 4 592 (517 928) -
Total revenues 1 634 051 310 215 (8 153 159) 9 527 669
Contribution to
profit 193 942 (73 660) (3 172 053) 3 267 387
Contribution to
headline
earnings 183 645 (55 452) (3 162 548) 3 265 793
Segment assets 4 660 165 2 184 242 (12 648 680) 11 086 939
Capital
expenditure 2 491 83 590 (1 389 888) 1 475 968
* Eliminations and adjustments mainly give effect to the elimination of the 50%
share attributable to the other joint venture party in Assmang.
Commentary
Headline earnings for the six months to 31 December 2009 have decreased by 88,7%
compared to the same period in the previous fiscal year, to R336,9 million due
to the significant decrease in the earnings of Assmang Limited (Assmang), and
the decreased commissions earned on the reduced 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 decreased by 89,3% to R601,7 million compared to the
same period of the previous fiscal year, due to lower selling prices for all
products. The global recession that set in during the last quarter of calendar
2008, resulted in prices reducing strongly for all the group`s commodities,
combined with a strengthening in the South African Rand/US Dollar exchange rate,
leading to lower revenues. Except for iron ore, market conditions for all
products were weak but did show some improvement towards the end of the period
under review.
Sales volumes
Assmang`s turnover for the period under review declined significantly, and
despite sales volumes for all products being higher compared to the same period
for the previous fiscal year, amounted to
R4,6 billion (2008: R10,9 billion), a reduction of 57,9%. The table below sets
out Assmang`s sales volumes for the period:
Half-year ended
31 December 31 December
Metric tons `000 2009 2008 % increase
Iron ore 4 452 3 455 29
Manganese ore* 1 582 1 291 23
Manganese alloys* 120 70 71
Charge chrome 75 65 15
Chrome ore* 99 80 24
* Excluding intra-group sales
Capital expenditure
The bulk of the group`s capital expenditure occurs in Assmang. The major capital
expenditure occurred in the iron ore and manganese divisions. A total of R772
million was spent on the Khumani Expansion Project (KEP) at Assmang`s Khumani
Iron Ore Mine, while R194 million was spent at Assmang`s Black Rock Manganese
Mine on the construction of a new enlarged beneficiation plant. The expenditure
programme on the KEP is planned to meet the timing of Assmang`s increased
allocation of railage capacity on the Sishen-Saldanha line from 10 to 14 million
tons per annum by mid-2012, and is progressing according to schedule. A further
R170 million was spent on furnace upgrades across Assmang`s Manganese and Chrome
divisions. A total of R27 million was spent on further developing two
underground shafts at the Rustenburg Chrome Ore Mine, with commercial production
expected to meet local commitments upon depletion of the existing opencast
resources over the next 18 months.
Outlook
Trading conditions have shown further signs of improvement, and customers and
agents are prepared to acquire more ore and alloy inventories. However, it
remains unclear as to the degree of recovery in the markets in which the group
trades. Commodity prices have increased from the lows experienced in early 2009,
and the weak US Dollar continues to have a positive impact on these prices,
however, with the SA Rand trading at relatively strong levels, group revenues
remain depressed. 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 the announcement include the final dividend relating to the
previous financial year of 1 000 cents (2008: 1 000 cents) per share, which was
declared on 26 August 2009 and paid to shareholders on 21 September 2009. Based
on the decreased earnings for the current period the board has declared a lower
interim dividend of 500 cents (2008: 1 000 cents) per share, which will be paid
to shareholders on or about 29 March 2010. In accordance with IFRS, this interim
dividend is not included in the results for the period under review as it was
declared after
31 December 2009.
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 (IASB). The accounting policies applied are
consistent with those adopted in the financial year ended 30 June 2009, with the
exception of the adoption of the following policies in response to changes in
IFRS:
IAS 1 (Amendment) - Presentation of Financial Statements; and
IFRS 8 - Operating Segments.
The adoption of this amendment and this standard has had no effect on the
financial statements of the group except for the disclosure of additional
information. In addition, further amendments to IFRS and interpretations as
issued by the IASB, have also been considered and adopted by the group. These
amendments and interpretations have not had any effect on the financial results
for the period or any requirement for additional disclosure.
Subsequent event
On 2 December 2009 shareholders were advised that, subject to certain conditions
precedent, an empowerment transaction had been concluded which would result in
share ownership by Historically Disadvantaged South Africans, increasing from
the existing 15,26% to 26,07%. Shareholders approved the transaction at a
shareholders` meeting convened for that purpose on 19 January 2010 and
subsequently all the suspensive conditions applicable to the first phase of the
transaction have been fulfilled. It is anticipated that the remaining conditions
will be fulfilled on or about the end of February 2010. Had the transaction been
implemented prior to 31 December 2009, earnings per share for the period under
review would have decreased by 54 cents per share to 1 359 cents per share, due
to the estimated costs of the transaction.
Directors
On 31 August 2009, Mr J W Lewis was withdrawn as alternate director, due to his
impending retirement from the group on 31 December 2009.
Declaration of interim dividend
Interim dividend No. 106 of 500 cents per share was declared on 16 February
2010, in the currency of the Republic of South Africa. In accordance with Strate
Limited, 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 Thursday, 18 March 2010.
The company`s ordinary shares will commence trading "ex dividend" from the
commencement of business on Friday, 19 March 2010.
The record date will be Friday, 26 March 2010.
Dividend cheques in payment of this dividend to holders of certificated shares
will be posted on or about Monday, 29 March 2010. 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, 29 March 2010.
Share certificates may not be dematerialised or rematerialised between Friday,
19 March 2010 and Friday, 26 March 2010, both days inclusive.
On behalf of the board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
17 February 2010
Registered office Transfer office
Assore House Computershare Investor
15 Fricker Road Services (Pty) Limited
IIlovo Boulevard 70 Marshall Street
Johannesburg 2196 Johannesburg 2001
Directors
Executive Non-executive
Desmond Sacco (Chairman) BM Hawksworth
RJ Carpenter (Deputy Chairman) MC Ramaphosa
CJ Cory (Chief Executive Officer) EM Southey
PC Crous (Technical and Operations) Dr JC van der Horst
Alternate
Company secretaries NG Sacco
African Mining and Trust Company Limited PE Sacco
R Smith
Assore Limited
Company registration number:
1950/037394/06
Share code: ASR ISIN: ZAE000017117
www.assore.com
Date: 17/02/2010 15:00:02 Supplied by www.sharenet.co.za
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