Kumba earnings halved by rail challenges and low prices

A decrease in global iron ore prices and disruptions to Transnet’s rail and port services were the major contributor to the earnings and profit drop experienced by Anglo American subsidiary  Kumba Iron Ore in 2022.

Kumba, the largest iron producer in SA, saw net profit decrease by 55% to R19.7bn (2021: R43.7bn), while headline earnings per share dropped 46% to about R56 per share.

As a result the dividend for 2022 will be 56% less than the previous year. The company, which released its annual results on Tuesday, will pay a total dividend of R45 per share against the 2021 dividend of R103 per share.

Kumba CEO Mpumi Zikalala said in the company results, that 2022 was “a year characterised by operational headwinds and several external challenges”.

Some of the outside challenges included extreme weather which affected mine performance and Transnet logistics constraints.

Total production for the year decreased by 8% to 37.7-million tonnes, ore railed was down 9% to 35.9-million tonnes and export sales decreased 9% to 36.6-million tonnes.