Kumba's results for the twelve months ended 31 December 2016
14 February, 2017
Kumba announces its results for the year ended 31 December 2016
Themba Mkhwanazi, CEO of Kumba Iron Ore, said, “It has been a successful year for Kumba, despite challenging and volatile iron ore markets. We acted quickly to restructure the business, reset the cost base and stabilise operating performance. In addition, we were awarded the residual Sishen mining right and settled our tax matter with SARS. We can now draw a line under these issues and focus on the business.
“The rise in prices and realising full value for Kumba’s premium product, together with our cost reductions, resulted in improved margins and strong cash flow generation. With total production of 41.5Mt, both Sishen and Kolomela exceeded operational guidance following a successful restructuring. Controllable costs were reduced by 34% lowering our average cash breakeven price to $29/tonne. Strong demand for our high quality product combined with excellent marketing allowed us to realise an impressive average price of $64 FOB - up 18% on last year.”
“This year’s excellent performance has enabled us to build a strong balance sheet and a net cash position of R6.2bn. This will support a conservative capital structure and place us, as a single commodity miner, in a strong position to deal with potential further market volatility.”
KEY FEATURES
- Regrettably, two fatalities
- Production of 41.5Mt, Sishen and Kolomela exceeding targets
- Substantial 34% reduction in controllable costs
- HEPS of R27.30 per share, up 131%
- Average cash breakeven price reduced to $29/tonne on the back of an average realised price of $64/tonne
- Balance sheet strengthened to net cash position of R6.2bn
- Sishen 21.4% residual mining right awarded and settlement agreement reached with SARS
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