Business

South Africa’s Kumba Iron annual earnings rise on higher ore rates

South Africa’s Kumba Iron Ore on Tuesday posted a rise in annual earnings, underpinned by higher iron ore prices and currency gains from a weaker rand exchange rate to the dollar.

The company, a unit of Anglo American, reported headline earnings per share (HEPS) of 50.88 rand for the year ended Dec. 31, compared with 30.28 rand a year earlier.

HEPS is the primary profit measure in South Africa that strips out certain one-off items.

Total revenue for the year rose 41% to 64.3 billion rand ($4.28 billion), compared with 45.7 billion rand a year earlier.

The miner said its annual revenue was driven by higher ore prices, stronger market premiums and currency gains despite lower sales volumes amid weaker domestic offtake.

“Our financial performance reflects the benefits of higher iron ore prices, improved efficiencies and further cost savings ahead of our target, which have cushioned the impact of the operational challenges experienced during the period,” said Kumba Chief Executive Themba Mkhwanazi.

Production, however, dropped 2% to 42.4 million tonnes, compared with 43.1 million tonnes in the year-ago period due to the impact from plant maintenance and equipment-related issues in the first half.

The company said it expects to produce between 41.5 million tonnes and 42.5 million tonnes of iron ore in 2020, and declared a final cash dividend of 15.99 rand per share bringing the total dividend to 46.78 rand per share.

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