August 30, 2017 / 8:21 AM / a year ago

South African iron ore, chrome producer Assore posts record profit due to higher prices

JOHANNESBURG, Aug 30 (Reuters) - South African base minerals and metals producer Assore posted record profit on Wednesday on higher prices but said it expects a supply glut to impact negatively on prices.

The company said headline earnings for the year to the end of June increased almost 200 percent to a record 5.2 billion rand ($399 million), in line with what the group had previously flagged to the market.

The full-year dividend doubled to 14 rand per share.

“The growth in the production of crude steel in China ... drove commodity prices higher during the year. Prices for iron ore were 37 percent higher than in 2016, at an average index price of $70 per tonne,” the company said.

“However, the impact of additional supply of iron ore, particularly from Australia and Brazil, is expected to have a detrimental effect on prices,” it added.

Earnings were further boosted by the group’s Dwarsrivier chrome unit, which benefited from a pickup in Chinese demand, posting a net profit of 843 million rand in its first full year of inclusion in the group’s results.

The company’s share price was 1.7 percent higher at 268.99 rand in mid-morning trade.

$1 = 13.0296 rand Reporting by Ed Stoddard; Editing by Adrian Croft

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