Kumba Iron Ore earnings and shareholder payout have taken a major hit in the interim results for the period ended June 30.
The Anglo American-owned iron ore producer cut its interim dividend by 52%, from R16.60 a year earlier to R7.90.
Revenue fell 11% to R30.9 billion, while basic earnings per share plunged 42% to R12.95. Headline earnings per share declined 41% to R13.24. Production also fell 3% to 17.69 million tonnes, while sales declined marginally to 18.56 million tonnes.
The decline was particularly pronounced at Kumba’s Kolomela mine, where production fell 16% to 4.95 million tonnes. At the same time, unit costs increased 22% to R659.06 per dry metric tonne, while cash costs rose 29% to R423.51 per tonne.
Difficult operating conditions
Mpumi Zikalala, Kumba chief executive, said the first-half performance reflected a challenging external environment and difficult operating conditions.
“Kumba’s first-half performance reflects the impact of a challenging external environment and difficult operating conditions. Despite these headwinds, we delivered EBITDA of R10.9-billion and an EBITDA margin of 35%.
“We remain focused on cost optimisation, capital allocation discipline and enhancing cash generation to support sustainable shareholder returns,” said Zikalala.
The weaker performance meant Kumba’s interim dividend fell to R2.5-billion in total, from what would have been about R5.35 billion had the company maintained last year’s per-share payout.
Sishen shows increase
Sishen showed 3% production increase to 12.74 million tonnes from 12.38 while its cash cost dropped 1% to R549.42 per dry metric tonne from R557.
However, Sishen’s overall unit cost increased 4% to R727.18 per dry metric tonne from R699.61.
“The strength of our balance sheet and cash generated from operations of R10.1-billion, together with our confidence in the long-term fundamentals of our business enabled the Board to declare an interim dividend of R2.5-billion, of which our empowerment partners will receive R0.8 billion. Our sustainability commitments remain integral to value creation and we delivered R24.0 billion of enduring shared value to our stakeholders,” said Zikalala.
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- Kumba Iron Ore's interim dividend was cut by 52%, dropping from R16.60 to R7.90 per share due to a 42% plunge in basic earnings per share and an 11% revenue decline to R30.9 billion.
- Production fell 3% overall to 17.69 million tonnes, with a significant 16% decrease at the Kolomela mine, which also saw a 22% increase in unit costs and a 29% rise in cash costs.
- Despite challenges, Kumba delivered R10.9 billion in EBITDA with a 35% margin and maintained a strong balance sheet, generating R10.1 billion in cash from operations.
- The Sishen mine's production rose 3% to 12.74 million tonnes, while cash costs decreased 1%, though overall unit costs increased 4%.
- Total interim dividends amounted to R2.5 billion, with R0.8 billion allocated to empowerment partners, reflecting a focus on cost optimization, capital discipline, and sustainability commitments.
Revenue fell 11% to R30.9 billion, while basic earnings per share plunged 42% to R12.95.
Mpumi Zikalala,
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“We remain focused on cost optimisation, capital allocation discipline and enhancing cash generation to support sustainable shareholder returns,” said Zikalala.
However,
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