[miningmx.com] — – MINING company Assore (ASR) on Thursday reported a 54.7% decline in full year headline earnings per share to 6,241 cents from 13,772 cents previously.
Headline earnings for the financial year to end June 2010 declined by 54.2% to R1.5bn from R3.3bn in the year to end June 2009 due to the decline in the earnings of Assmang and a stronger rand.
While demand for all group commodities was much improved, due to the continued strong demand from the East, Assore said the strength of the Rand further impacted earnings negatively.
Profit for the year halved to R1.5bn from R3.3bn and earnings per share shrank to 6,181 cents from 13,669 cents in the previous year.
Revenue was R2bn lower at 7.6 billion rand from R9.5bn despite an overall increase in sales volumes.
“Sales volumes were up overall, while profitability was negatively impacted by turbulent trading conditions, lower (US) dollar prices, except for iron ore, and the strong Rand,” said Assore chairman Desmond Sacco.
“The second half shows improvements in market conditions for all our products, however, the sustainability of a recovery in the markets in which Assore trades is still not clear,” Sacco said.
In line with the results for the year the board has declared a final dividend of 1 200 cents making a total dividend for the year of 1 700 cents per share, compared to 2 000 cents a year ago.
Assmang, which is 50% owned by Assore, reported a 56.7% fall in headline earnings to R2.7bn while its turnover for the year under review declined to R12.9bn from R15.3bn last year.
Looking ahead, Assore said markets had recovered from the lows experienced towards the end of 2008 and into 2009.
But it said the extent of this recovery has been muted due mainly to the recent pullback in Chinese economic growth and the European debt crisis, placing a degree of pressure on commodity prices in general.
The group said ore and alloy prices for manganese and chrome have recently come under pressure, but iron ore prices remain robust.
It noted that the pricing convention in the iron ore industry had undergone a structural change with effect from April, where prices are now negotiated on a quarterly or spot basis.
The new basis is now in line with the pricing convention operating in the manganese ore market.
“These circumstances, in combination with the group’s exposure to fluctuations in exchange rates, make it difficult to estimate developments on group earnings with reasonable assurance or accuracy,” it said.
