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 Financial Officer ➢ Tiaan van Aswegen Director : Operations and Growth ➢ Patrick Sacco Director : Sales & Marketing www.assore.com Preliminary reviewed results for the year ended 30 June 2017
GROUP STRUCTURE 3 Fricker Rd & Oresteel Investments Public Boleng Trust Assore Employee (Pty) Ltd Shareholders Trusts 52% 22% 14% 12% Assore Ltd 50% 100% 100% 29% Assore Assore IronRidge Assmang Operations Services Khumani Ore & Metal Dwarsrivier Beeshoek Minerais RMDC Exploration ( 51%) (56%) Black Rock ZCM African Cato Ridge Mining & Sakura (54%) Wonderstone Trust CRA ( 50%) www.assore.com Preliminary reviewed results for the year ended 30 June 2017
GROUP PROFILE 4 ➢ 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 www.assore.com Preliminary reviewed results for the year ended 30 June 2017
RESULTS HIGHLIGHTS 5 ➢ 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) www.assore.com Preliminary reviewed results for the year ended 30 June 2017
RESULTS HIGHLIGHTS 6 Revenue Profit before tax R7 224 m R2 472 m 146% 518% Attributable earnings Headline earnings R5 021 m R5 209 m 226% 199% Cash generated by operations Free cash flow R2 985 m R2 858 m 166% 306% EPS DPS R48.67 R14.00 227% 100% www.assore.com Preliminary reviewed results for the year ended 30 June 2017
SALES VOLUMES (‘000 metric tons) 7 Commodity 2017 2016 % change Iron Ore 17 275 17 008 2% Manganese Ore* 2 974 3 030 -2% * excluding sales to Cato Ridge Works Manganese Alloys 73% 303 175 Chrome Ore 1 279 1 147 12% www.assore.com Preliminary reviewed results for the year ended 30 June 2017
AVERAGE INDEX PRICES (USD) 8 Commodity 2017 2016 % change Iron Ore 37% 70 51 (62% Fe CFR China) USD/mt Manganese Ore 100% 5.77 2.89 (44% Mn CIF China) USD/dmtu Chrome Ore 300 150 100% (44% Cr CIF China) USD/mt www.assore.com Preliminary reviewed results for the year ended 30 June 2017
ATTRIBUTABLE EARNINGS ( R’m ) 9 6 000 5 000 1 108 4 000 515 647 415 3 000 2 000 3 572 3 266 3 092 340 372 1 000 1 317 1 281 - 82 - 81 - 254 - 114 - -1 000 JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 Assmang 50% Assore Services Assore Operations www.assore.com Preliminary reviewed results for the year ended 30 June 2017
HEADLINE EARNINGS ( R’m ) v IRON ORE PRICE (USD / mt) 10 6 000 140 127 123 120 5 000 100 4 000 3 037 80 1 803 72 3 000 70 60 2 428 51 2 000 40 986 1 006 2 427 2 172 1 000 20 1 106 990 738 - - JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 H1 H2 Iron Ore Price (RHS) www.assore.com Preliminary reviewed results for the year ended 30 June 2017
HEADLINE EARNINGS & DIVIDEND DECLARED ( R’m ) 11 6 000 5 000 4 000 3 000 5 209 4 230 2 000 3 534 1 000 1 976 1 954 1 744 1 396 977 838 838 - JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 Headline Earnings Dividend (Gross) www.assore.com Preliminary reviewed results for the year ended 30 June 2017
ATTRIBUTABLE EARNINGS BY COMMODITY 12 R’ million 6 000 5 000 224 5% 1 058 4 000 197 21% (5%) 38 401 48% (92%) 464 1 296 3 000 26% (8%) 2 000 84 3 484 3 004 122 128 2 443 1 000 1 415 1 362 - JUNE 2013 JUNE 2014 JUNE 2015 JUNE 2016 JUNE 2017 Iron Ore Manganese Chrome Ore Other -1 000 2017 (2016) www.assore.com Preliminary reviewed results for the year ended 30 June 2017
CASH FLOW ANALYSIS 13 8 000 2 250 1 230 7 000 554 6 000 126 337 5 047 251 2 432 5 000 R’million 4 000 3 000 2 189 2 000 1 000 - Net cash Operating Working Net interest Assmang Dividends paid Taxation paid Net additions Net cash 30 Jun 2016 cash flows capital earned dividends (net) to PPE and 30 Jun 2017 before WC intangibles www.assore.com Preliminary reviewed results for the year ended 30 June 2017
MARKET TRENDS Description of picture
IRON ORE PRICE (Fe 62% Fines CFR China USD / mt) 15 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Fe 62% Source: S&P Global Platts www.assore.com Preliminary reviewed results for the year ended 30 June 2017
IRON ORE LUMP PREMIUM (USD / mt – monthly average) 16 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Lump Prem $/ton Source: S&P Global Platts www.assore.com Preliminary reviewed results for the year ended 30 June 2017
MANGANESE ORE PRICES (USD / dmtu) 17 10 9 8 7 6 5 4 3 2 1 0 37% Semi Carbonate (FOB PE) 44% Oxide (CIF China) Source: Metal Bulletin www.assore.com Preliminary reviewed results for the year ended 30 June 2017
MANGANESE ALLOY PRICES (USD / mt) 18 2100 1900 1700 1500 1300 1100 900 700 500 HCFeMn MCFEMn SiMn Source: CRU www.assore.com Preliminary reviewed results for the year ended 30 June 2017
CHROME ORE PRICES (USD / mt) 19 450 400 350 300 250 200 150 100 50 0 44% Conc UG2 Source: CRU www.assore.com Preliminary reviewed results for the year ended 30 June 2017
OUTLOOK Description of picture
OUTLOOK 21 ➢ 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 www.assore.com Preliminary reviewed results for the year ended 30 June 2017
QUESTIONS Description of picture
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