Assore, the JSE-listed mining firm focused on producing iron, chrome and manganese ore, maintained its annual dividend, despite being hurt by the weak price environment for the majority of commodities on which it focuses. Photo: Supplied
Assore, the JSE-listed mining firm focused on producing iron, chrome and manganese ore, maintained its annual dividend, despite being hurt by the weak price environment for the majority of commodities on which it focuses. Photo: Supplied

Assore declares dividend in spite of weak commodities environment

By Dineo Faku Time of article published Feb 24, 2020

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JOHANNESBURG – Assore, the JSE-listed mining firm focused on producing iron, chrome and manganese ore, maintained its annual dividend, despite being hurt by the weak price environment for the majority of commodities on which it focuses.

The company on Friday declared a R14 a share final dividend for the year ended December 2019, bringing the total dividend for 2019 to R24, compared with R22 a share in 2018.

The higher payout comes as strong group cash generation resulted in group net cash jumping by 14 percent to R9 billion compared with R7.9bn a year earlier.

However, headline earnings fell 28 percent to R2.1bn, compared with R2.9bn for the previous period, said chief executive Charles Walters.

“Our interim results were negatively affected by weaker prices in the chrome and manganese markets and lower shipments of iron ore in the period under review, ” he said, adding that the weaker exchange rate and elevated iron ore prices had helped to cushion the effects of the weaker pricing environment experienced in manganese and chrome.

The combination of oversupply and weakened demand saw manganese ore prices falling in 2019, similarly, the oversupply of ferrochrome in the group’s main market resulted in a decrease in demand. 

The average market price for iron ore increased to $80 (R1 200) a ton (62 percent iron content, “fines” grade, delivered in China) from $69 a ton as the tragic tailings dam failure in Brazil, as well as weather disruptions in northern Brazil and Western Australia, resulted in reduced seaborne supply.

Despite high demand, sales volumes decreased by 11 percent due to logistical and operational constraints, predominantly at Saldanha Bay port, the company said.

Assore’s shares closed 1.79 percent higher at R227.99 on Friday.

BUSINESS REPORT

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