Kumba Iron Ore earnings jump
Kumba said higher iron ore prices and its drive to cut costs by reducing the amount of waste mined contributed to the improvement in earnings.
JOHANNESBURG - Kumba Iron Ore ltd , a unit of Anglo American, said on Tuesday its 2016 earnings more than doubled, partly on higher prices, but held off on paying a dividend because of a volatile market outlook.
Headline earnings per share rose 131% to R27.30, in line with what the company previously flagged to the market.
Kumba said higher iron ore prices, as well its own drive to cut costs by reducing the amount of waste mined, contributed to the improvement in earnings.
Total revenue of R40.8 billion, a rise of 13%, mainly as a result of the increase in average realised FOB iron ore prices (2016: US$64/tonne; 2015: US$53/tonne)
No dividend was declared.
The company said: "While the reinstatement of the dividend is a key priority for the group, the board concluded that it would be prudent to remain ungeared over the short to medium term whilst the period of price volatility continues."
The company also said it was prudent to maintain balance sheet flexibility as Anglo American has signalled it was reviewing its portfolio with an eye to Kumba’s disposal.