File picture: IOL
JOHANNESBURG - Iron ore and manganese producer Assore’s share price yesterday strengthened 11.74percent to R328.63 as the market welcomed the news of a 67percent interim dividend hike to R10 a share.

Headline earnings for the six months to December 31, 2017, strengthened by 12percent to R2.4billion, compared to the same period in the previous financial year.

Charles Walters, Assore’s chief executive said: “Improved volumes across our range of products and improved US dollar prices for all commodities in our basket except chrome ore were enough to overcome a 6percent strengthening of the rand allowing us to post a 12percent growth in headline earnings.

“Given our strong balance sheet and good operational cash generation, we were pleased to be in a position to increase the interim dividend by 67percent to R10 per share,” said Walters.

Environmental regulations imposed in China had resulted in strong demand for high grade iron ores, including “lumpy” iron ore, the company said.

Walters said the strengthening of the rand against the dollar was expected to be a headwind in the year ahead.

“The strong rand will have a slightly negative impact. However, we expect the strong demand for our products will mitigate this,” he said.

Stable ranges

The strong demand is expected on the bank of the improved global economic growth prospects.

“As a result, strong demand for the group’s products is anticipated in the short term and prices are expected to remain within relatively stable ranges,” the company said. It was expected that Chinese environmental policies should continue to support demand for the group’s high-quality products.

The group’s major interest is the 100percent ownership of Dwarsrivier and its 50percent interest in Assmang, which it controls jointly with African Rainbow Minerals.

Capital expenditure in Assmang was consistent with that of the previous period, at R1.2 billion.