South Africa’s Kumba Iron Ore sees higher H1 headline profit

Kumba Iron Ore is South Africa’s top producer of the steel-making ingredient. (Image courtesy of Kumba Iron Ore)

South Africa’s Kumba Iron Ore Ltd said on Tuesday first-half headline earnings is expected to rise at least 160 percent, boosted by higher iron ore export prices and a weaker rand/U.S. dollar exchange rate.

The company, a unit of Anglo American Plc, said headline earnings per share is expected to increase by at least 14.9 rand in the six months ending June 30, from 9.31 rand a year earlier.

Headline EPS is the primary profit measure in South Africa, and strips out certain one-off items.

The company said headline earnings in the first half of the year is expected to increase by at least 4.76 billion rand ($334.01 million) from 2.98 billion rand reported a year ago.

In February Kumba reported slightly lower full-year headline earnings for 2018, due to a dip in revenue and lower sales volumes, bogged down by problems at state-run rail, port and pipeline firm Transnet – allegedly linked to state corruption and struggling financially.

Alongside seven train derailments, Kumba was affected last year by the closure of an iron ore export line after a truck collided with a bridge, prompting a decline in the volumes of ore Kumba railed to port and export sales volumes. The line has since reopened.

Kumba left its 2019 forecast unchanged last month, with total production expected between 43 million tonnes to 44 million tonnes.

($1 = 14.2510 rand)

(By Justin George Varghese; Editing by Bernard Orr)

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