JSE- LISTED Kumba Iron Ore flagged that it expects a boost in its 2021 annual basic earnings of about 52 percent despite the impact of Covid-19 in 2020 and difficulties with state-owned-owned freight and logistics firm Transnet.
Transnet problems included fires at terminals in Durban and Richards Bay. The parastatal was also plagued with copper cable theft, Kumba said yesterday in a trading update.
Basic earnings for the 12 months ended December would be between R31.27 billion and R34.6bn, while basic earnings per share (Eps) were expected to be between R97.45 and R107.82 – an increase of between 37 percent and 52 percent, said Kumba, which is an Anglo American plc subsidiary, which owns the Sishen and Kolomela mines in the Northern Cape.
Headline earnings per share (Heps) were likely to be between R97.43 and R107.80, a year-on-year increase of between 37 percent and 52 percent compared to 2020.
For the year under review, production at the Sishen mine increased by 9 percent year-on-year to 28 million tons, while the Kolomela mine’s production increased by 8 percent to 12.8 million tons.
Production at the Sishen mine decreased to 6.5 million tons for the quarter, compared with 6.6 million tons produced in the fourth quarter of the previous year.
The Kolomela mine recorded an increase in production, from 3.1 million tons in the fourth quarter of 2020 to 3.2 million tons.
The export market sales for the fourth quarter were 3 percent higher year-on-year at 10.7 million tons.
Kumba’s chief executive, Mpumi Zikalala, said: “Kumba’s strong safety and operational performance in 2021 delivered a 9 percent increase in production and more than five years of fatality-free production.
“While market uncertainty may persist, our premium quality products and value-focused strategy ensure that we are playing our role in the global steel industry’s transition to a cleaner and more sustainable future,“ she said.
The company’s focus on product quality and development of markets beyond China had also contributed to an average realised price of $161 (R2 435) per wet metric tons (wmt), which was 18 percent above the benchmark price of $136/wmt, she said.
Meanwhile, Kumba also reported that more than 75 percent of its workforce was fully vaccinated and a booster programme was currently being rolled out to further protect its workforce against the pandemic. As a result, Kumba said, it continued to see minimal operational disruption.
“For those who have not yet vaccinated, we continue to actively encourage them to take the earliest opportunity to be vaccinated and hence protect themselves and those around them.
“We continue to support the national Covid-19 vaccination programme in our host communities, where we have partnered with the government and other stakeholders to make vaccines more accessible,” the company said.