Kumba Iron Ore's annual results for the twelve months ended 31 December 2022
21 February, 2023
Kumba announces its annual results for the year ended 31 December 2022
Highlights from the Provisional Audited Results for the Year Ended 31 December 2022 and Cash Dividend Declaration
KUMBA DELIVERS RESILIENT PERFORMANCE DESPITE TOUGH ENVIRONMENT
Kumba Iron Ore has delivered a solid financial performance and continued to create sustainable value for stakeholders while navigating severe external headwinds in 2022.
Speaking at the company’s full year results presentation, Mpumi Zikalala, Chief Executive Officer of Kumba Iron Ore said:
"Kumba delivered a resilient financial performance in a year characterised by a volatile macro environment, lower iron ore prices, and logistics, cost, and operational challenges. Despite market volatility, demand for our high-grade iron ore helped us realise an average price of US$113 per wet metric tonnes (wmt), 13% above benchmark prices, while achieving an adjusted earnings before interest, tax, depreciation and amortisation*
(EBITDA) of R37.3 billion and headline earnings of R56.19 per share.
"There were no level 3-5 environmental incidents or fatalities in 2022, and we are committed to retaining a relentless focus on sustainability and safety. Sadly, we suffered a fatality on 13 February 2023 at Kolomela mine. We remain committed to zero harm and continue our relentless focus on eliminating fatalities and fostering a safe operating environment.
“As ever, we are committed to creating enduring stakeholder value. Last year we paid over R8.9bn in taxes to the fiscus, paid out R6.5 billion in salaries and benefits, and made over R10 billion in capital investments to sustain our business and the life of our assets.
“Locally we support 45 schools and 48 Early Childhood Development Centres, provided 18 000 megalitres of water to our communities, while spending R5.4 billion in procurement in the Northern Cape, where we employ 79% of our staff. When mines thrive, our broader communities also benefit, as illustrated by the over 29 000 local offsite jobs we have facilitated since 2018.
“Our performance has confirmed that we have a good set of fundamentals and strategy in place for value delivery. We have premium quality, high value assets with life extension opportunities which positions us well for future growth. This is supported by our proven operational resilience, strong marketing team, and efficient and prudent capital allocation.
"We are pleased to declare a final 2022 dividend of R5.2 billion bringing Kumba's total shareholder dividends to R14.5 billion, while our empowerment partners will also receive total dividends of R4.7 billion for the year."
“Looking forward we will continue our unrelenting focus on safety and sustainability, cost discipline, operational excellence and enhancing our premium products while supporting greater collaboration with Transnet to stabilise and restore the operational performance of our rail lines and ports.
‘While we can’t control external factors, we believe there is much scope for optimism as we continue to focus on what is in our control, and to capitalise on our enduring competitive advantage – our high-quality product and working to decarbonise our value chain to meet the demand from a world hungry for green steel.”
Full Year results highlights include:
Safety and sustainability focus:
- Over six and half years of fatality-free production to end of 2022
- Zero new cases of occupational diseases
- Over seven years without any level 3-5 environmental incidents
- R63.3 billion of shared value created
Resilient financial performance:
- Average realised FOB export price of US$113 per wet metric tonne, 13% above benchmark price
- Cost savings of R1.1 billion, R5.2 billion saved since 2018
- Resilient adjusted EBITDA margin of 50%, down from 63%
- Closing net cash of R9.3 billion
Balanced capital allocation:
- Attributable free cash flow of R10.4 billion, 66% lower
- Final dividend of R16.30 per share, total cash dividends of R45.00 per share
- ROCE of 76%, down from 147%
The complete Full Year Results are available on our website and attached.
Rosebank
21 February 2023
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Download the Annual Results for the year ended 31 December 2022 (4.6MB, opens in a new window)