Wrap Text
Final results for the year ended 30 June 2012
Assore Limited
Company registration number: 1950/037394/06
Share code: ASR ISIN: ZAE000146932
("Assore" or "Group" or "Company")
Final results for the year ended 30 June 2012
- Headline earnings up 15,2% to a record R3,7 billion
- Record iron ore volumes
- Capital expansion programme on schedule
- Final dividend increased to R3,00 per share
COMMENTARY
Earnings for the financial year to 30 June 2012 have increased by 25,3% on the previous year to
R4,0 billion. The increase is mainly due to the increased earnings of Assmang Limited (Assmang),
which increased by 19,0% to R6,9 billion, based on the trading conditions described below. Assore
holds a 50% interest in Assmang, which is proportionately consolidated in accordance with
International Financial Reporting Standards (IFRS). Commissions earned on the higher sales of Group
products increased by 23,2% compared to the previous financial year and also contributed positively
to the Group's earnings.
The increased level of earnings for the year was due mostly to higher sales volumes of iron ore and
despite lower US Dollar sales prices for all of the Group's products, the weaker Rand/US Dollar
exchange rate offset these lower sales prices to a large degree. This resulted in revenues from iron
ore increasing substantially, while those for the other products of the Group were at similar levels
compared to the previous financial year.
Sales volumes
Sales of iron ore increased mainly as a result of Assmang's Khumani Iron Ore Mine ramping up its
production to 14 million tons per annum. Production efficiencies led to increased volumes of
manganese alloys in line with the Group's strategy to increase its ferromanganese capacity. While the
closure of chrome furnaces at Machadodorp Works for their conversion to manganese furnaces led to
decreased sales of charge chrome, it did however result in additional chrome ore volumes being
available for export.
Assmang's turnover for the year under review increased to R23,7 billion (2011: R19,1 billion), and the
following table sets out the sales volumes of Assmang's products for the year under review:
Year ended 30 June Increase/
Metric tons '000 2012 2011 (decrease)%
Iron ore 14 753 10 006 47
Manganese ore* 2 905 2 882 1
Manganese alloys* 270 218 24
Charge chrome 174 238 (27)
Chrome ore* 521 373 40
*Excluding intra-group sales to alloy plants
Capital expenditure
The bulk of the Group's capital expenditure occurs in Assmang and amounted to R4,5 billion
(2011: R4,1 billion) for the year under review. R3 billion was spent at the Khumani Iron Ore Mine, with
R1,3 billion being spent on the Khumani Expansion Project (KEP), designed to produce 16 million tons
of ore per annum. The KEP has been completed on schedule and within budget. A further R1,2 billion
was spent on development of the mine, largely on waste-stripping. Assmang's Manganese Ore Mines
spent R450 million, most of which was for replacement capital items and mobile mining equipment.
The amount includes R86 million of the R5,6 billion intended spend on the expansion of the
manganese mines. R153 million was spent on the ongoing development of the Nchwaning Manganese
Mine. A further R150 million was spent at Cato Ridge Works on environmental and other sustainability
projects. The conversion of two chrome furnaces to ferromanganese furnaces at Machadodorp Works
continues and it is expected that the furnaces will be commissioned in the third calendar quarter of
2012. Apart from the expenditure in Assmang, R39 million has been spent on the development of two
underground chromite mines at Rustenburg Minerals, the scheduled commissioning of which is
expected to meet their planned production volumes during calendar 2013.
Outlook
Sovereign debt issues in Europe, the apparent economic slowdown in China and subdued recovery in
the United States, continue to hamper world economic growth, which is critical to the level of global
steel production and predicting the Group's performance. Although world steel production in the first
half of calendar 2012 was at record levels, this level is expected to decline over the next six months,
which could result in a reduction in demand for the Group's products. In addition, global supply of the
Group's products has increased which has put pressure on prices. This, together with the volatility in
exchange rates, makes it difficult to comment on the performance of the Group for the next six
months with any confidence.
Dividends
The results in this announcement include the interim dividend of 250 cents (2011: 200 cents) per share
which was declared on 16 April 2012 and paid to shareholders on 14 May 2012. In line with the results
for the year, the Board has declared a final dividend of 300 cents (2011: 250 cents) per share, making a
total dividend in respect of profit for the year of 550 cents (2011: 450 cents) per share. The final dividend
will be paid to shareholders on or about 1 October 2012 and, in accordance with IFRS, is not included
in the results contained in this announcement as it was declared after year end.
Review by auditors
Ernst & Young Inc, the Group's auditors, have reviewed and issued an unmodified report on the
condensed financial results included in this announcement in accordance with ISRE 2410 - Review of
Interim Financial Information Performed by the Independent Auditor of the Entity. A copy of their report
is available for inspection at the registered office of the Company.
Accounting policies and basis of preparation
The condensed financial results for the year under review have been prepared under the supervision
of Mr CJ Cory, CA(SA) and in accordance with IAS 34 - Interim Financial Reporting as it applies to final
results. The accounting policies applied are consistent with those adopted in the financial year ended
30 June 2011. Revisions and amendments to, and interpretations of IFRS effective in the year and
adopted early, have not had a material impact on the results or disclosures of the Group.
Directors
Since the interim results announcement on 15 February 2012, the following changes to the Board have taken place:
- 3 May 2012 - Mr DMJ Ncube resigned as independent non-executive director;
- 31 August 2012 - Mr PC (Phil) Crous resigned as Group Technical and Operations Director, following his decision
to take early retirement; and
- 1 September 2012 - Messrs AD (Alastair) Stalker and BH (Tiaan) van Aswegen, both previously alternate directors,
were appointed as Group Marketing Director and Group Technical and Operations Director respectively.
Declaration of final dividend
Shareholders are advised that the board of directors ("the Board") has declared Final Dividend Number 111
("the Dividend"), of 300 cents (2011: 250) per share (gross) for the year ended 30 June 2012 on 31 August 2012.
In terms of paragraph 11.17 of the Listings Requirements of JSE Limited, shareholders are advised of the following
with regard to the declaration:
1. the Dividend has been declared from accumulated revenue;
2. the local Dividend Tax rate is 15%;
3. the Company does not have any Secondary Companies Tax (STC) credit available to reduce the impact of the Dividend Tax;
4. the net local dividend amount is 255 cents per share for shareholders liable to pay the Dividends Tax;
5. the issued ordinary share capital of Assore is 139 607 000 shares; and
6. Assore's Income Tax reference number is 9045/018/84/4.
The salient dates are as follows:
- Last day for trading to qualify and
participate in the final dividend Thursday, 20 September 2012
- Trading "ex dividend" commences Friday, 21 September 2012
- Record date Friday, 28 September 2012
- Dividend payment date Monday, 1 October 2012
Share certificates may not be dematerialised or rematerialised between Friday, 21 September 2012
and Friday, 28 September 2012, both days inclusive.
On behalf of the Board
Desmond Sacco CJ Cory
Chairman Chief Executive Officer
Johannesburg
3 September 2012
Consolidated income statement
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Revenue 13 762 351 11 180 035
Turnover 12 947 766 10 547 806
Cost of sales (7 337 643) (6 044 740)
Gross profit 5 610 123 4 503 066
Other income 1 984 313 848 731
Other expenses (1 792 466) (457 797)
Finance costs (217 244) (77 790)
Profit before taxation 5 584 726 4 816 210
Taxation (1 537 692) (1 566 524)
Profit for the year 4 047 034 3 249 686
Attributable to:
Shareholders of the holding company 4 033 013 3 219 754
Non-controlling shareholders 14 021 29 932
As above 4 047 034 3 249 686
Earnings as above 4 033 013 3 219 754
Profit on disposal (net of tax) of available-for-sale investment (406 092) -
Impairment of non-financial assets 82 705 -
Profit on disposal of fixed assets (1 863) (407)
Headline earnings for the year 3 707 763 3 219 347
Earnings per share (basic and diluted) - cents 3 827 2 691
Headline earnings per share (basic and diluted) - cents 3 519 2 690
Dividends per share declared in respect of the profit for
the year (cents) 550 450
- Interim 250 200
- Final 300 250
Weighted average number of ordinary shares (million)
Ordinary shares in issue 139,61 139,61
Weighted impact of treasury shares held in trust (34,24) (19,94)
105,37 119,67
Consolidated statement of comprehensive income
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Profit for the year (as above) 4 047 034 3 249 686
Other comprehensive (losses)/income for the year, (389 544) 204 882
net of tax
Profit on disposal of available-for-sale investments
recognised in profit for the year (472 200) -
Net gain on revaluation to market value of available-for-sale
investments 15 734 242 336
Deferred capital gains taxation 60 326 (33 927)
(396 140) 208 409
Exchange differences on translation of foreign operations 6 596 (3 527)
Total comprehensive income for the year, net of tax 3 657 490 3 454 568
Attributable to:
Shareholders of the holding company 3 643 469 3 424 636
Non-controlling interests 14 021 29 932
As above 3 657 490 3 454 568
Consolidated statement of financial position
At At
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment, investment
properties and intangible assets 9 529 499 8 027 352
Investments
available-for-sale 239 332 887 249
other 34 725 30 789
Other non-current financial assets 106 665 53 051
Total non-current assets 9 910 221 8 998 441
Current assets
Inventories 2 177 066 2 005 577
Trade and other receivables 2 049 782 1 632 270
Cash resources 3 324 437 2 334 734
Total current assets 7 551 285 5 972 581
TOTAL ASSETS 17 461 506 14 971 022
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shareholders' interest 11 200 402 10 765 524
Non-controlling interests 126 858 114 287
Total equity 11 327 260 10 879 811
Non-current liabilities
Deferred taxation liabilities 2 357 001 2 173 621
Long-term liabilities 1 938 844 222 888
Total non-current liabilities 4 295 845 2 396 509
Current liabilities
Interest-bearing 192 019 154 147
Non-interest-bearing 1 646 382 1 540 555
Total current liabilities 1 838 401 1 694 702
TOTAL EQUITY AND LIABILITIES 17 461 506 14 971 022
Capital expenditure (R million) 2 312,5 2 112,5
Capital commitments (R million) 3 357,4 3 282,4
Consolidated statement of cash flow
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Cash generated from operations 3 757 225 3 521 328
Cash utilised in investing activities (2 318 977) (2 193 127)
Treasury shares acquired (2 692 555) -
Proceeds on disposal of available-for-sale investments 663 650 -
Long-term finance raised 2 310 000 -
Long term liabilities repaid (713 900) (894 555)
Other financing activities (15 740) (6 821)
Increase in cash for the year 989 703 426 825
Cash resources at beginning of year 2 334 734 1 907 909
Cash resources per statement of financial position 3 324 437 2 334 734
Consolidated statement of changes in equity
Year ended Year ended
30 June 30 June
2012 2011
Reviewed Audited
R'000 R'000
Share capital, share premium and other reserves
Balance at beginning of year 734 092 529 210
Other comprehensive (loss)/income (389 544) 204 882
Balance at end of year 344 548 734 092
Treasury shares
Balance at beginning of year (2 359 028) (2 359 028)
Acquired during the year (2 692 555) -
Balance at end of year (5 051 583) (2 359 028)
Retained earnings
Balance at beginning of year 12 390 460 9 697 261
Profit for the year 4 033 013 3 219 754
Dividends paid (net of dividends on treasury shares) numbers 109
and 110 aggregating R5,00 per share (2011: R4,40 per share) (516 036) (526 555)
Balance at end of year 15 907 437 12 390 460
Ordinary shareholders' interest 11 200 402 10 765 524
Non-controlling interests
Balance at beginning of year 114 287 102 035
Total comprehensive income 14 021 29 932
Dividends paid to minorities (8 046) (14 153)
Foreign currency translation reserve arising on consolidation 6 596 (3 527)
Balance at end of year 126 858 114 287
Total equity 11 327 260 10 879 811
Segmental information
Joint venture mining and beneficiation Other
Marketing mining and
R'000 Iron ore Manganese Chrome Sub-total and shipping beneficiation Eliminations* Group
Year ended 30 June 2012 Reviewed
Revenues
Third party 15 323 509 6 762 194 2 040 587 24 126 290 1 327 879 371 327 (12 063 145) 13 762 351
Inter-segment - - - - 384 610 260 853 (645 463) -
Total revenues 15 323 509 6 762 194 2 040 587 24 126 290 1 712 489 632 180 (12 708 608) 13 762 351
Contribution to profit 5 835 547 1 223 279 (174 837) 6 883 989 819 943 (228 924) (3 441 995) 4 033 013
Year ended 30 June 2011 Audited
Revenues
Third party 10 358 436 6 376 483 2 487 215 19 222 134 1 067 873 290 571 (9 400 543) 11 180 035
Inter-segment - - - - 628 448 3 388 (631 836) -
Total revenues 10 358 436 6 376 483 2 487 215 19 222 134 1 696 321 293 959 (10 032 379) 11 180 035
Contribution to profit 4 650 908 1 369 738 (233 839) 5 786 807 408 982 (70 043) (2 905 992) 3 219 754
*Eliminations comprise of the elimination of the 50% share attributable to the joint venture party in Assmang and inter-segmental transactions.
Directors:
Executive
Desmond Sacco (Chairman), CJ Cory (Chief Executive Officer), AD Stalker (Marketing),
BH van Aswegen (Technical and Operations)
Alternate
PE Sacco
Non-executive
EM Southey* (Deputy Chairman and Lead Independent Director), RJ Carpenter, WF Urmson*
*Independent
Registered office
Assore House, 15 Fricker Road, IIlovo Boulevard, Johannesburg, 2196
Company secretaries
African Mining and Trust Company Limited
Transfer office
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor
The Standard Bank of South Africa Limited
www.assore.com
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