[miningmx.com] — IRON, manganese and chrome ore miner Assore on Wednesday reported an increase in interim earnings of 48.5% to R2.1bn, on the back of improved sales volumes and increased commissions.
Turnover for the period to end-December increased to R6.4bn, up 40,2% from R4.6bn in the corresponding period of the previous year.
“Market conditions for the Group’s commodities deteriorated mostly due to the sovereign debt issues in Europe, leading to a decline in demand and resultant price decreases,” read a company statement.
“In comparison to the same period in the previous year, the group sold higher volumes of iron ore and higher average prices were realised, although these prices were more volatile.
“The weaker Rand/US Dollar exchange rate compensated for some of the impact of the lower prices.”
Assore said it would continue to invest significant amounts of capital, with more than R2.1bn spent on capital items in 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 Desmond Sacco, Assore chairman.
“The outlook for the Group remains uncertain due to a number of factors. Chinese steel production declined for the second consecutive quarter while sovereign debt issues in Europe persist. 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.
“Slow economic growth in Europe and elsewhere is also placing pressure on prices of the group’s other commodities. Since most of the group’s commodities are priced in US dollars, it remains significantly exposed to fluctuations in the rand/dollar exchange rate.”
Assore intends declaring an interim dividend in April 2012 of 250 cents per share.
