Results presentation for the year ended 30 June 2017* 30 & 31 - - PowerPoint PPT Presentation

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Results presentation for the year ended 30 June 2017* 30 & 31 - - PowerPoint PPT Presentation

Jun 06, 2023 178 likes •400 views

Results presentation for the year ended 30 June 2017* 30 & 31 August 2017 * Preliminary reviewed results released on SENS on 30 August 2017 EXECUTIVE MANAGEMENT TEAM 2 Charles Walters Chief Executive Officer Ross Davies Chief

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Results presentation

for the year ended 30 June 2017*

30 & 31 August 2017

* Preliminary reviewed results released on SENS on 30 August 2017

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

EXECUTIVE MANAGEMENT TEAM

➢ Charles Walters Chief Executive Officer ➢ Ross Davies Chief Financial Officer ➢ Tiaan van Aswegen Director : Operations and Growth ➢ Patrick Sacco Director : Sales & Marketing

2

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com 52%

GROUP STRUCTURE

3 Oresteel Investments (Pty) Ltd

Assore Ltd

Boleng Trust

Assmang Assore Operations Khumani Beeshoek Black Rock Cato Ridge Sakura (54%) CRA (50%) Dwarsrivier RMDC

(56%)

ZCM

Wonderstone 14% 12% 100% 100% 50%

Assore Services Ore & Metal Minerais (51%) African Mining & Trust

Fricker Rd & Assore Employee Trusts

Public Shareholders 22%

IronRidge Exploration

29%

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

GROUP PROFILE

➢ Assmang (50%)

  • Iron Ore Mines

SA 17.5 million mt Iron Ore 85% export Beeshoek & Khumani

  • Manganese Ore Mines

SA 3.3 million mt Manganese Ore 90% export Nchwaning & Gloria

  • Cato Ridge Works

SA 70 kt High Carbon FeMn 95% export

  • Cato Ridge Alloys (50%)

SA 60 kt Med Carbon FeMn 90% export

  • Sakura Ferro Alloys (54%)

Malaysia 220 kt High Carbon FeMn 99% export

➢ Assore Operations (100%)

  • Dwarsrivier Mine

SA 1.3 million mt Chrome Ore 95% export

  • Wonderstone

SA 5,000 mt Pyrophyllite 90% export

➢ Assore Services (100%)

  • Ore & Metal

Sales, Marketing & Logistics Service to Assmang and Assore operations

  • AMT

Technical and Management Services to Assmang and Assore operations

➢ Iron Ridge (29.9%)

  • Iron Ridge

AIM-listed exploration company 4

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

RESULTS HIGHLIGHTS

➢ Record headline and attributable earnings ➢ Excellent contribution from Dwarsrivier (incorporated for first full year) ➢ Record sales volumes of iron ore and chrome ore ➢ Good progress with Black Rock expansion project (82% complete, 4 million mt by 2020) ➢ Capital Expenditure

  • Assmang

R2 826 million (2016: R2 978 million including R149 million at Dwarsrivier)

  • Assore Operations

R150 million (2016: R26 million excluding Dwarsrivier)

➢ Excellent management of mining costs per ton in all operations ➢ Prices achieved significantly higher than prior year ➢ Excellent safety performance at all operations ➢ Currency strengthened 5% year-on-year ➢ Free cash flow after capex R2 858 million (2016: R1 075 million) ➢ Dividend increased to R14 per share (2016: R7 per share)

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SLIDE 6

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

RESULTS HIGHLIGHTS

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Revenue Profit before tax R7 224 m R2 472 m Attributable earnings Headline earnings R5 021 m R5 209 m Cash generated by operations Free cash flow R2 985 m R2 858 m EPS DPS R48.67 R14.00

146% 227% 226% 306% 100% 166% 199% 518%

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SLIDE 7

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

SALES VOLUMES (‘000 metric tons)

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Commodity 2017 2016 % change

Iron Ore 17 275 17 008 2% Manganese Ore*

* excluding sales to Cato Ridge Works

2 974 3 030

  • 2%

Manganese Alloys 303 175 73% Chrome Ore 1 279 1 147 12%

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

AVERAGE INDEX PRICES (USD)

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Commodity 2017 2016 % change

Iron Ore (62% Fe CFR China)

USD/mt

70 51 37% Manganese Ore (44% Mn CIF China)

USD/dmtu

5.77 2.89 100% Chrome Ore (44% Cr CIF China)

USD/mt

300 150 100%

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SLIDE 9

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

ATTRIBUTABLE EARNINGS (R’m)

3 092 3 572 1 317 1 281 3 266 415 515 340 372 647

  • 81
  • 82
  • 254
  • 114

1 108

  • 1 000
  • 1 000

2 000 3 000 4 000 5 000 6 000 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 Assmang 50% Assore Services Assore Operations 9

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SLIDE 10

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

HEADLINE EARNINGS (R’m) v IRON ORE PRICE (USD / mt)

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1 106 2 427 990 738 2 172 2 428 1 803 986 1 006 3 037

127 123 72 51 70

  • 20

40 60 80 100 120 140

  • 1 000

2 000 3 000 4 000 5 000 6 000 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 H1 H2 Iron Ore Price (RHS)

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SLIDE 11

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

HEADLINE EARNINGS & DIVIDEND DECLARED (R’m)

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3 534 4 230 1 976 1 744 5 209 838 1 396 838 977 1 954

  • 1 000

2 000 3 000 4 000 5 000 6 000 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 Headline Earnings Dividend (Gross)

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SLIDE 12

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

ATTRIBUTABLE EARNINGS BY COMMODITY

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2017 (2016)

48% (92%) 26% (8%) 21% (5%) 5% Iron Ore Manganese Chrome Ore Other 3 004 3 484 1 362 1 415 2 443 464 401 128 122 1 296 38 197 84 1 058 224

  • 1 000
  • 1 000

2 000 3 000 4 000 5 000 6 000 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017

R’ million

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SLIDE 13

Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

CASH FLOW ANALYSIS

13 2 189 2 432 251 337 2 250 1 230 554 126 5 047

  • 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 Net cash 30 Jun 2016 Operating cash flows before WC Working capital Net interest earned Assmang dividends Dividends paid (net) Taxation paid Net additions to PPE and intangibles Net cash 30 Jun 2017 R’million

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MARKET TRENDS

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

IRON ORE PRICE (Fe 62% Fines CFR China USD / mt)

15 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Fe 62%

Source: S&P Global Platts

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

IRON ORE LUMP PREMIUM (USD / mt – monthly average)

16 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 Lump Prem $/ton

Source: S&P Global Platts

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

MANGANESE ORE PRICES (USD / dmtu)

17 1 2 3 4 5 6 7 8 9 10 37% Semi Carbonate (FOB PE) 44% Oxide (CIF China)

Source: Metal Bulletin

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

MANGANESE ALLOY PRICES (USD / mt)

18 500 700 900 1100 1300 1500 1700 1900 2100 HCFeMn MCFEMn SiMn

Source: CRU

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

CHROME ORE PRICES (USD / mt)

19 50 100 150 200 250 300 350 400 450 44% Conc UG2

Source: CRU

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OUTLOOK

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Preliminary reviewed results for the year ended 30 June 2017 www.assore.com

OUTLOOK

➢ Synchronised economic growth around the world ➢ Positive fundamentals in Chinese steel industry driving demand for ores ➢ Iron ore supply from Australia and Brazil likely to weigh on market ➢ Mining Charter uncertainty negative for the industry ➢ Assore well-positioned for both challenges and opportunities ahead

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QUESTIONS