Kumba Iron Ore’s earnings have taken a hit due to lower iron ore prices and sales. The company’s revenue fell by 21% to R68.5 billion, while its adjusted earnings before interest, tax, depreciation, and amortization (ebitda) dropped by 38% to R28.1 billion.
The decline in revenue was mainly due to a 21% decrease in the average iron ore price, which resulted in a R17.6 billion decrease in revenue. Additionally, a 2% decrease in sales volumes and a 1% stronger rand also contributed to the decline.
However, Kumba’s cost-cutting measures have been successful, with the company achieving R4.4 billion in savings, exceeding its target of R2.5 billion to R3 billion. The company has also declared a final cash dividend of R19.90 per share.
Looking ahead, Kumba expects its production to be between 35 million and 37 million tonnes in 2025, with sales guidance in line with production guidance. The company is also targeting a cost optimization benefit of R2.5 billion to R3 billion for the full year 2025.
CEO Mpumi Zikalala stated that the company’s UHDMS technology underpins its premium product strategy, and that Kumba will work closely with government and Transnet to support logistics network reform.