Johannesburg - Assore, the mining company that owns a 48 percent stake in Assmang, the manganese miner, posted stronger earnings for the second half of the financial year to June because of the weak rand and higher metal prices. The group showed earnings a share of 233c, up from 87c for the first six months.
But this was too little too late for the company, given the 62 percent decline in earnings for the first half, leaving earnings for the year 31,6 percent lower at R89,5 million. Operating profit for the full year dropped from R194,9 million to R137,9 million, while turnover rose to R963,6 million from R763,3 million in 1999.
Assore had also decided to reduce its dividend by 10c compared with the 1999 financial year, to 30c. The company said yesterday the decision to cut the dividend had been driven by its capital expenditure commitments.
Assmang and its wholly owned subsidiary Ferralloys, in which Assore owns a 45,4 percent stake, are involved in fiveyear R1,2 billion development programme. The development is focused on constructing the new R517 million shaft system at Assmang's manganese mine at Nchwaining in the Northern Cape. It is also developing the R190 million Dwarsrivier opencast chrome mine, upgrading furnaces and constructing a pelletising plant, which is expected to cost about R440 million.
"Funding of the programme at this stage is by shortterm borrowings, but at least some of it is likely to be converted to mediumterm loans if money market conditions are favourable," said the company.
Desmond Sacco, the group's chairman, said that, while the outlook was positive, the group was significantly exposed to the dollar and to interest rate fluctuations in the medium term.
"While conditions in these markets are fairly stable at present, it is difficult to predict, with any certainty, their combined effect on the group's results for next year," said Sacco. Assore closed unchanged at R30,20 yesterday.