JOHANNESBURG (miningweekly.com) – JSE-listed Assore on Wednesday reported a 48.5% headline earnings increase to R2.1-billion for the six months ended December, up from R1.39-billion a year earlier.
This was mostly attributed to 50%-owned Assmang’s 57.2% increase in headline earnings to R3.9-billion, as well as higher commissions earned on improved sales volumes of group commodities.
Turnover increased 40.2% to R6.4-billion, up from R4.6-billion in 2010.
Market conditions for most of the group’s commodities, particularly chrome and chrome ore, deteriorated during the six-month period, mostly owing to the sovereign debt issues in Europe.
However, iron-ore and manganese commodities experienced higher sales volumes during the period.
“While overall sales volumes and profits improved significantly during the first half of this year, the European debt crisis, lower Chinese steel production and rand/dollar exchange rate volatility make it difficult to predict the results for the second half,” said Assore chairperson Desmond Sacco.
Meanwhile, the company reported a R2.1-billion capital spend, including R928-million for Assmang’s Khumani expansion project and a further R669-million for the Khumani mine’s ramp-up to 14-million tons a year of iron-ore for the export market.
Sacco pointed out that the group’s outlook remained uncertain as Chinese steel production declined for the second consecutive quarter and the sovereign debt issues in Europe persisted.
“Certain high cost Chinese iron-ore miners have stopped production as a result of lower iron-ore prices being experienced, causing reasonably strong demand for seaborne iron-ore,” he said, adding that slow economic growth in Europe and elsewhere also placed pressure on prices of the group’s other commodities.
Assore declared an interim dividend of 250c a share, up from 200c a share in 2010.