Kumba Iron Ore interim earnings soar 239%

Anglo American unit Kumba Iron Ore said half year earnings soared by 239%, as higher iron ore prices and a weaker rand provided a boost.

Headline earnings were ZAR 10.1bn (£580m) on the back of a 77% rise in revenue to ZAR 34.5bn as iron ore prices increased 57% to $108 per tonne.

Headline earnings per share (HEPS) were 31.51 rand in the six months ended June 30, 2019, compared to 14.51 rand during the same period a year ago.

The rand weakened by an average 16% against the dollar, Kumba said in a statement. Sales volumes were flat at 21.4m tonnes, compared with 21.2m a year ago.

“The escalation of the trade war between the US and China has led to broader economic stimulus measures in China providing a solid growth underpin for the infrastructure and property sectors,” the company said.

“Global supply, which has been gradually contracting over the past two years was further reduced this year following the Brumadinho tailings dam tragedy and subsequent suspensions in Brazil.”

“These have taken approximately 50 megatonnes out of the seaborne supply, while Australian production was impacted by cyclones earlier in the year and operational challenges more recently.”