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Assmang Limited – Results for the year ended June 2005

22 August 2005

Assmang Limited (Assmang) today announced its results for the financial year ended 30 June2005. Assmang is jointly controlled by African Rainbow Minerals Limited (ARM), and Assore Limited (Assore).

Financial Results

The Group reported an increase of 33,4% in its turnover for the year ended 30 June 2005 to R4 406,5 million (2004: R3 304,5 million). Attributable earnings increased by 334,7% to R949,0 million (2004: R218,3 million), equivalent to R267,45 per share (2004: R61,5 per share). Headline earnings increased to R959,1 million, up 348,6% from R213,8 million reported in 2004.

The significant improvement in the Group’s results can mainly be attributed to increases in US dollar commodity prices across all of Assmang’s products, particularly manganese alloys which peaked during the year. Increase in sales volumes for manganese (from 1.4 million tons to 1.8 million tons) and iron ores (from 5.5 million tons to 5.8 millions tons) together with the weakening of the rand against the US dollar towards the latter part of the financial year also impacted positively on the years results. In addition, cost of sales was contained through operational efficiencies and effective unit cost control programmes.

As a result of the Group’s improved results, a final dividend of R34.00 per share (2004:R7.50 per share) has been declared after year end and is not included in the results recorded in this announcement. This brings the total dividend for the year to R52.00.

Contributions to attributable earnings by the three divisions, before deducting secondary tax on companies of R11,3 million (2004 : R3,3 million) amounted to R747,7 million (2004 : R235,4 million) from the manganese division, R135,2 million (2004 : R11,1 million) from the iron ore division and R77,4 million (2004 : R24,9 million – loss) from the chrome division.

Major capital projects

The company continued with its capital expenditure programme, spending R699,1 million (2004 : R493,7 million) during the year including capitalised interest of R3,7 million (2004: R18,3 million). Of this, R202,7 million was spent on completing the new shaft complex at the Nchwaning manganese mine, which has commenced production and is fully operational. The total capital cost of the project is estimated to be R748,0 million excluding capitalised interest of which R688,6 million has already been spent. A further R82,0 million was spent on the construction of the Dwarsrivier underground chrome mine, which is expected to be completed by the end of this calendar year at a total capital cost of R221,7 million.

Total commitments for future capital expenditure at 30 June 2005 amount to R454,4 million (2004: R441,5 million), which will mainly be spent on current and additional enhancement projects. This expenditure will be funded from internally generated cash and available borrowing resources.

Current projects underway within Assmang’s growth strategy include:

  • The completion of the underground mine at Dwarsrivier chrome mine to replace the existing opencast mine;
  • The development of additional mineable reserves at the iron ore division, which includes the commissioning of an additional opencast mining area at Beeshoek mine, and board approval to confirm the mining and development of the vast resources north of the Beeshoek mine, and adjacent to Sishen Mine, on the Bruce, King and Mokaning properties; and
  • The upgrading of certain furnaces at Cato Ridge and Machadodorp.

Outlook for the next six months

International demand for iron ore remains fairly buoyant and volumes are expected to approximate those of the year under review. However, demand and prices for the company’s other products could come under pressure due to an over supply in the international market. Any increase in sales volumes of iron ore in the year ahead will be largely dependant on finalising logistical capacity with Transnet and The South African Port Operations.

Earnings growth for the year ahead will largely be dependant on the rand US dollar exchange rate, US dollar prices and cost saving exercises which have already yielded positive results throughout the divisions.

Note to Editors

Assmang , a company incorporated in the Republic of South Africa, mines manganese and iron ores in the Northern Cape Province and chrome ore at Dwarsrivier in the Mpumalanga Province. It also produces manganese alloys at its works at Cato Ridge in the KwazuluNatal Province, and chrome alloys at its works at Machadodorp, in the Mpumalanga Province.

Cato Ridge Alloys (Proprietary) Limited ("Cato Ridge Alloys"), a joint venture between Assmang, Mizushima Ferroalloys Company Limited ("Mizushima") and Sumitomo Corporation ("Sumitomo"), produces refined ferromanganese at the ferromanganese works. The major portion of the alloy products is exported.

Assmang mines iron and manganese ore near Postmasburg and Hotazel about 700 kilometres southwest of Johannesburg respectively. Most of the Group's production is exported to the Far East, Europe and the United States of America. The balance of production is sold locally, principally manganese ore to the Cato Ridge Works, where it is used in the production of manganese alloys. Assmang's Dwarsrivier chrome ore mine supplies ore to the Machadodorp Works for the production of chrome alloys for the export market.

Formed in 1935 and listed on the Johannesburg Stock Exchange in 1936 the Group employs 2 602 people. In terms of a long standing arrangement the Company is controlled jointly by African Rainbow Mineral Limited (which holds 50,4%) and Assore Limited (which holds 45,7%), both of which are listed on the JSE Securities Exchange South Africa.

For more information please contact:

Pieter Rörich
Office: +27(11) 779 1300
or: 082 570 5064
Email: pieter.rorich@arm.co.za

Jan Steenkamp
Office: +27(11) 779 1000
or: +27(0)82 492 6948
Email: jan.steenkamp@arm.co.za

Phil Crous
Office: +27(11) 770 6909
or: +27(0)83 250 9994
Email: philcrous@assore.com

Disclaimer:

Forward Looking Statements Certain statements in this presentation constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange A ct of 1934. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of commodities; hazards associated with underground and surface mining; labor disruptions; changes in government regulations, particularly environmental regulations; changes in exchange rates; currency devaluations; inflation and other macroeconomic factors; and the impact of the AIDS crisis in South Africa. These forward looking statements speak only as of the date of publication of these pages. The company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events.

Investor Relations

Jongisa Magagula
Executive Director: Investor Relations and New Business Development

Telephone: +27 (0) 11 779 1300
E-mail: jongisa.magagula@arm.co.za



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