Results presentation for the half-year ended 31 December 2017 * 21 - - PowerPoint PPT Presentation

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Results presentation for the half-year ended 31 December 2017 * 21 - - PowerPoint PPT Presentation

Mar 30, 2023 348 likes •615 views

Results presentation for the half-year ended 31 December 2017 * 21 & 22 February 2018 * Results for the half-year ended 31 December 2017 released on SENS on 21 February 2018 EXECUTIVE MANAGEMENT TEAM 2 Charles Walters Chief Executive

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SLIDE 1

Results presentation

for the half-year ended 31 December 2017 *

21 & 22 February 2018

* Results for the half-year ended 31 December 2017 released on SENS on 21 February 2018

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SLIDE 2

Results for the half-year ended 31 December 2017 www.assore.com

EXECUTIVE MANAGEMENT TEAM

2

Charles Walters Chief Executive Officer Ross Davies Chief Financial Officer Tiaan van Aswegen Director : Operations and growth Patrick Sacco Director : Marketing

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SLIDE 3

Results for the half-year ended 31 December 2017 www.assore.com 29%

GROUP STRUCTURE

3 52%

Oresteel Investments (Pty) Ltd Assmang Assore Operations

14% 12% 100% 100% 50%

Fricker Rd & Assore Employee Trusts

22%

IronRidge Khumani Beeshoek Black Rock Cato Ridge Machadodorp Sakura (54%) CRA (50%) Dwarsrivier RMDC (56%) ZCM Wonderstone Ore & Metal Minerais (51%) African Mining and Trust (AMT) Exploration Boleng Trust Public Shareholders Assore Ltd Assore Services

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Results for the half-year ended 31 December 2017 www.assore.com

GROUP PROFILE

Assmang (50%)

Iron Ore Mines Beeshoek and Khumani SA 17.5 million mt Iron ore 85% export Manganese Ore Mines Nchwaning and Gloria SA 3.3 million mt Manganese ore 90% export 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 1.5 million mt Chrome ore 95% export Wonderstone SA 5,000 mt Pyrophyllite 90% export

Assore Services (100%)

Ore & Metal Sales marketing and logistics services to Assmang and Assore operations AMT Technical and management services to Assmang and Assore operations

Iron Ridge (29.5%)

Iron Ridge AIM-listed exploration company

4

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Results for the half-year ended 31 December 2017 www.assore.com

SAFETY HIGHLIGHTS

➢ Zero fatalities in the period ➢ 6 million fatality-free shifts at Black Rock manganese mines ➢ Assmang safety awards (2017)

  • Black Rock Manganese Mine
  • 1st place for best safety performance in underground mines*
  • 2nd place for bet environmental performance for its rehabilitation project on the Gamagara riverbank*
  • Beeshoek Iron Ore Mine
  • 1st place for best safety performance for base metal mines*
  • 2nd place for best year-on-year safety improvement*
  • Best safety performance award for achieving 16,000 fatality-free production shifts#
  • Khumani Iron Ore Mine
  • 1st place in the health and wellness category for its wellness peer educators’ programme*

5 *Awarded at the annual Mine Safe conference, arranged by the industry, the DMR and labour

# Awarded by the DMR

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SLIDE 6

Results for the half-year ended 31 December 2017 www.assore.com

RESULTS HIGHLIGHTS

➢ Headline earnings down 5% on 2016 (first half of 2017 financial year (refer Note below)) ➢ Synchronised growth in the group’s markets ➢ Prices for iron and manganese ores marginally better than 2016, but Rand 6% stronger ➢ Black Rock expansion project still on track for completion in 2020 (84% complete, 4 million mt) ➢ Capital Expenditure (for 6 months)

  • Assmang

R1 166 million (2016: R1 154 million)

  • Assore Operations

R167 million (2016: R38 million)

➢ Mining cost increases per ton below inflation in all operations ➢ Free cash flow after capex R1 554 million (2016: R1 730 million) ➢ Dividend increased to R10 per share (2016: R6 per share)

6 Note: unless otherwise stated, 2016 refers to the half-year ended 31 December 2016

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SLIDE 7

Results for the half-year ended 31 December 2017 www.assore.com

5% 17% 11% 11% 3%

RESULTS HIGHLIGHTS

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67% 4%

Revenue

R3 842 m

10%

Attributable earnings

R2 454 m

Cash generated by operations

R983 m

EPS

R23.79

Profit before tax

R1 024 m

Headline earnings

R2 429 m

Free cash flow

(before dividends)

R2 314 m

DPS

R10.00

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SLIDE 8

Results for the half-year ended 31 December 2017 www.assore.com

Commodity Half –year ended 31 December 2017 Half –year ended 31 December 2016 % change

Iron Ore 9 130 8 805 +4% Manganese Ore*

* excluding sales to Cato Ridge Works

1 556 1 417 +10% Manganese Alloys 162 139 +17% Chrome Ore 794 733 +8%

SALES VOLUMES (‘000 metric tons, 100% basis)

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SLIDE 9

Results for the half-year ended 31 December 2017 www.assore.com

Commodity Half –year ended 31 December 2017 Half –year ended 31 December 2016 % change

Iron Ore (62% Fe CFR China)

USD/mt

68 65 +5% Manganese Ore (44% Mn CIF China)

USD/dmtu

6.30 6.02 +5% Chrome Ore (44% Cr CIF China)

USD/mt

195 224

  • 13%

AVERAGE INDEX PRICES (USD)

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SLIDE 10

Results for the half-year ended 31 December 2017 www.assore.com

ATTRIBUTABLE EARNINGS (R’m)

3 572 1 317 1 281 3 266 1 727 515 340 372 647 299

  • 82
  • 254
  • 114

1 108 428

  • 1 000
  • 1 000

2 000 3 000 4 000 5 000 6 000 June 2014* June 2015* June 2016* June 2017* December 2017 Assmang 50% Assore Services Assore Operations

10 * full-year results

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SLIDE 11

Results for the half-year ended 31 December 2017 www.assore.com

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

2 427 990 738 2 545 2 429 1 803 986 1 006 2 664 123 72 51 70 68

  • 20

40 60 80 100 120 140

  • 1 000

2 000 3 000 4 000 5 000 6 000 June 2014 June 2015 June 2016 June 2017 December 2018 H1 H2 Iron ore index price (RHS)

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SLIDE 12

Results for the half-year ended 31 December 2017 www.assore.com

HEADLINE EARNINGS & DIVIDEND DECLARED (R’m)

4 230 1 976 1 744 5 209 2 429 1 396 838 977 1 954 1 396

  • 1 000

2 000 3 000 4 000 5 000 6 000 June 2014* June 2015* June 2016* June 2017* December 2017 Headline Earnings Dividend (Gross)

12 * full-year results

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SLIDE 13

Results for the half-year ended 31 December 2017 www.assore.com

39% (48%) 39% (26%) 21% (21%) 2%(5%)

Iron Ore Manganese Chrome Ore Other

ATTRIBUTABLE EARNINGS BY COMMODITY

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December 2017 (2017*)

* full-year results

3 484 1 362 1 415 2 443 952 401 128 122 1 296 950 197 84 1 058 506 224

  • 1 000
  • 1 000

2 000 3 000 4 000 5 000 6 000 June 2014* June 2015* June 2016* June 2017* December 2017 R’ million * full-year results

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SLIDE 14

Results for the half-year ended 31 December 2017 www.assore.com

CASH FLOW ANALYSIS

5 047 983 445 213 1 000 825 220 42 6 601

  • 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000

Net cash 30 Jun 2017 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 31 Dec 2017

R’million 14

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SLIDE 15

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MARKET TRENDS

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Results for the half-year ended 31 December 2017 www.assore.com

World crude steel output increases by 5.3% in 2017

200 400 600 800 1000 1200 1400 1600 1800 2010 2011 2012 2013 2014 2015 2016 2017 Mt World Rest of World China

Source: Worldsteel.org

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SLIDE 17

Results for the half-year ended 31 December 2017 www.assore.com

Crude steel production annual growth trend

  • 5

5 10 15 20 25 2010 2011 2012 2013 2014 2015 2016 2017 Percentage World Rest of World China

Source: Worldsteel.org

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SLIDE 18

Results for the half-year ended 31 December 2017 www.assore.com

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

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

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Source: Platts

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Results for the half-year ended 31 December 2017 www.assore.com

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

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 Lump Prem $/ton

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Source: Platts

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Results for the half-year ended 31 December 2017 www.assore.com

MANGANESE ORE PRICES (USD / dmtu)

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

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Source: Metal Bulletin

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SLIDE 21

Results for the half-year ended 31 December 2017 www.assore.com

MANGANESE ALLOY PRICES (USD / mt)

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500 700 900 1100 1300 1500 1700 1900 2100 2300 HCFeMn MCFEMn SiMn

Source: CRU

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SLIDE 22

Results for the half-year ended 31 December 2017 www.assore.com

CHROME ORE PRICES (USD / mt)

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

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Source: CRU

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OUTLOOK

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Results for the half-year ended 31 December 2017 www.assore.com

OUTLOOK

➢ Improved world economic growth (expected 3,7%) ➢ World economic growth appears to be well synchronised ➢ Prices in the short-term are expected to remain strong ➢ Good demand expected for high-quality raw materials ➢ Recent political events perceived to be positive for South Africa - regulatory uncertainty negative for the industry

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QUESTIONS