Global miner Anglo American’s South African subsidiary Kumba Iron Ore has announced its interim results for the six months ended June 30 this year In the given period, Kumba Iron Ore’s net profit decreased 16.4 percent to ZAR 11.02 billion ($668.2 million) compared to ZAR 13.18 billion in the corresponding period of the previous financial year, while the company's total revenue fell by eight percent to ZAR 31.6 billion ($1.91 billion) compared to ZAR 34.5 billion recorded in the first half of 2019, due to lower prices and sales volumes. In the given period, Kumba recorded an operating profit of $15.04 billion ($911.61 million), compared to an operating profit of $17.97 million for the first half of 2019.
In the first half of the current year, the company’s EBITDA declined 14 percent year on year to ZAR 17.4 billion ($1.05 billion), reflecting lower sales volumes and an inflation-led cost escalation, while its EBITDA margin fell to 55 percent in the given year, from 58 percent in the same period of the previous year. The company has also reported ZAR 7.1 billion free cash flow for the same period.
Meanwhile, in the first six months of the year, Kumba’s sales volumes decreased by 13 percent to 18.6 million mt compared to 21.4 million mt in the first half of the previous year, due to lower exports and domestic sales.
“Kumba’s production of 17.9 million mt and sales of 18.6 million mt were in line with our coronavirus-adjusted guidance for the first half of the year,” said Kumba chief executive Themba Mkhwanazi. The company warned that the threat of a second wave of the pandemic still poses a crucial risk despite the recovery in China and the reopening of the European economies. The company anticipates that its capital expenditure for 2020 will range between ZAR 5.6 billion ($339.44 million) and ZAR 6.1 billion ($369.72 million).