Kumba flags rip-roaring interims, but lowers its 2021 sales guidance

PRETORIA-headquartered Kumba Iron Ore yesterday flagged rip-roaring earnings for the half-year ended June, but lowered its 2021 sales guidance by 1 million tons resulting from rail constraints and poor climate throughout the first half of the year.

Kumba, an Anglo American plc subsidiary, stated in its buying and selling assertion for the six months ended June 2021 that topic to Covid-19, unrest, rail and climate disruptions, it had revised its sales forecast to between 30 million tons and 40 million tons from a earlier estimate of between 40 and 41 million tons.

Kumba stated export sales have been up 5 p.c to 19.4 million tons within the six months ended June 2021 in comparison with 18.6 million tons a year earlier and have been 12 p.c larger throughout the second quarter in contrast with the second quarter of 2020.

The iron ore producer, which operates the Kolomela and Sishen mines within the Northern Cape, stated that along with home sales, complete sales have been 3 p.c larger to 19.5 million tons in contrast with 18.9 million tons in 2020. “However, the impact of rail constraints in the first four months and subsequent disruptions to shipments in June due to equipment breakdown and inclement weather at Saldanha Port, led to a 10 percent decrease in the second quarter of this year, compared to first quarter sales of 10.3 million tons,” stated Kumba.

Kumba recorded a 12 p.c leap in manufacturing to twenty.4 million tons, up from 18.2 million tons a year earlier, pushed by an 11 p.c manufacturing enchancment at Sishen to 13.9 million tons and a 14 p.c output development on the Kolomela mine at 6.4 million tons.

Kumba stated relative to the second quarter in 2020, which was affected by Covid-19-related disruptions, manufacturing had elevated by 14 p.c to 9.8 million tons, up from 8.6 million tons in the identical interval final year. However, in comparison with the ten.6 million tons achieved within the first quarter of 2021, manufacturing was lowered by 7 p.c because it managed down excessive stock ranges that had constructed up on the mines resulting from rail constraints.

Kumba flagged that it will report roaring earnings for the half year underneath review on larger steel costs.

The group stated headline earnings for the interval would seemingly be between R22.755 billion and R23.690bn, a rise of between 171 and 182 p.c from the earlier comparable six months ended June 30, 2020. Headline earnings per share have been prone to be between R70.96 and R73.87, a rise of between 171 and 182 p.c from the comparative interval. “The increase in earnings for the period is largely attributable to higher average realised free on board export iron ore prices and higher total sales volumes, partially offset by the

stronger rand/US dollar exchange rate, relative to the comparative period,” stated Kumba. Kumba is scheduled to supply the company’s outcomes on Tuesday.

Iron ore costs have surged to report highs pushed by sturdy demand from China, the world’s prime metal shopper. The sturdy value surroundings for metals have been a serious contributor to South Africa’s commerce surplus recorded in May.

Kumba stated it needed to date achieved over 5 years of fatality-free manufacturing.

Kumba shares closed 1.78 p.c larger at R702.50 on the JSE yesterday.

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