Mining holding company, Assore, which holds a 50% interest in Assmang, which it controls jointly with African Rainbow Minerals, released a trading statement on Tuesday advising that US Dollar selling prices for the group’s iron and manganese products have declined substantially over the current financial year from those achieved in the previous financial year.
Assore said that average index US Dollar prices for 62% iron content fines grade ore delivered in China over the current year to date have averaged approximately $72/t, compared to $123/t in the previous year.
The impact of these lower prices on earnings has been partly offset by a weaker Rand/Dollar exchange rate that dominated over the current year.
In addition, the group says that it expects to record impairment charges after taxation against certain of its jointly controlled and owned smelting and mining operations of R411 million and against available-for-sale financial assets of R109 million.
Based on the trading conditions set out above, attributable earnings for the year ended 30 June 2015 are anticipated to decline to between R1.2 million and R1.5 million compared to R4 million recorded for the previous year, while headline earnings are anticipated to decline to between R1.7 million and R2 million compared to R4.2 million recorded for the previous year.
These lower levels of earnings are anticipated to result in declines of attributable earnings per share for the year ended 30 June 2015 to between R11.89 and R14.53 from R38.81 per share and headline earnings per share to between R16.47 and R20.13 per share from R40.98 per share.
The decline in percentage terms of attributable earnings on the previous year is therefore expected to be between 62.5% and 69.4% and the decline in headline earnings is expected to be between 50.9% and 59.8%.
Earnings per share calculations are based on a weighted average number of 103.21 million shares in issue, as per the year ended 30 June 2014.
Assore expects to publish its results for the financial year ended 30 June 2015 on 27 August 2015.