COMMENTARY | SALES VOLUMES | CAPITAL EXPENDITURE | OUTLOOK | DIVIDENDS | ACCOUNTING POLICIES
SUBSEQUENT EVENT | DIRECTORS
Headline earnings for the six months to 31 December 2009 have decreased by 89,3% compared to the same period in the previous fiscal year, to R336,9 million due to the significant decrease in the earnings of Assmang Limited (Assmang), and the decreased commissions earned on the reduced sales of group products.Assore holds a 50% interest in Assmang,which is proportionately consolidated in accordance with International Financial Reporting Standards (IFRS).
Assmang’s headline earnings decreased by 89,3% to R601,7 million compared to the same period of the previous fiscal year, due to lower selling prices for all products.The global recession that set in during the last quarter of calendar 2008, resulted in prices reducing strongly for all the group’s commodities, combined with a strengthening in the South African Rand/US Dollar exchange rate, leading to lower revenues. Except for iron ore, market conditions for all products were weak but did show some improvement towards the end of the period under review.
Assmang’s turnover for the period under review declined significantly, and despite sales volumes for all products being higher compared to the same period for the previous fiscal year, amounted to R4,6 billion (2008: R10,9 billion), a reduction of 57,9%.The table below sets out Assmang’s sales volumes for the period:
The financial results for the period under review have been prepared on the historical cost basis, except for financial instruments that are fairly valued,in accordance with IAS 34 – Interim Reporting,issued by the International Accounting Standards Board (IASB).The accounting policies applied are consistent with those adopted in the financial year ended 30 June 2009, with the exception of the adoption of the following policies in response to changes in IFRS:
The adoption of this amendment and this standard has had no effect on the financial statements of the group except for the disclosure of additional information. In addition, further amendments to IFRS and interpretations as issued by the IASB, have also been considered and adopted by the group. These amendments and interpretations have not had any effect on the financial results for the period or any requirement for additional disclosure.
On 2 December 2009 shareholders were advised that, subject to certain conditions precedent, an empowerment transaction had been concluded which would result in share ownership by Historically Disadvantaged South Africans, increasing from the existing 15,26% to 26,07%.Shareholders approved the transaction at a shareholders’meeting convened for that purpose on 19 January 2010 and subsequently all the suspensive conditions applicable to the first phase of the transaction have been fulfilled. It is anticipated that the remaining conditions will be fulfilled on or about the end of February 2010. Had the transaction been implemented prior to 31 December 2009, earnings per share for the period under review would have decreased by 54 cents per share to 1 359 cents per share, due to the estimated costs of the transaction.
On 31 August 2009, Mr J W Lewis was withdrawn as alternate director, due to his impending retirement from the group on 31 December 2009.