Kumba Iron Ore reports record EBITDA for 2020, to extend Sishen mine’s life

Tuesday, 23 February 2021 12:41:00 (GMT+3)   |   Istanbul
       

Global miner Anglo American’s South African subsidiary Kumba Iron Ore has announced its annual results for 2020. In the given period, Kumba Iron Ore’s net profit increased 39.9 percent to ZAR 29.84 billion ($2.04 billion) compared to ZAR 21.32 billion in the previous financial year, while the company’s total revenue rose by 24.6 percent to ZAR 80.10 billion ($5.48 billion) compared to ZAR 64.28 billion recorded in 2019, mainly as a result of higher prices and a weaker exchange rate, partially offset by lower sales volumes. In the given period, Kumba recorded an operating profit of $40.84 billion ($2.79 billion), compared to an operating profit of $28.81 billion in 2019.

In the given year, the company’s EBITDA rose by 37 percent year on year to ZAR 45.81 billion ($3.12 billion), driven by strong revenue growth, while its EBITDA margin rose to 57 percent in the given year, from 52 percent in 2019. The company has also reported ZAR 20.7 billion ($1.41 billion) free cash flow for the same period.

Meanwhile, in 2020, Kumba’s production volumes fell by 12.7 percent to 37.0 million mt, while its sales volumes decreased by six percent to 39.7 million mt, both year on year.

The company anticipates its production and sales to be between 40-41 million mt in 2021.

“Kumba delivered a record EBITDA, while keeping our commitment on health and safety, and supporting our communities as we navigated exceptional conditions,” said Kumba chief executive Themba Mkhwanazi. The company anticipates that its capital expenditure for 2021 will range between ZAR 10.8 billion and ZAR 11.3 billion. Kumba plans to spend ZAR 3.6 billion ($245.38 million) to extend the life of its Sishen mine up to 2040 through the optimization of current activities. The company is also developing its Kapstevel South mine at Kolomela, while continuing its exploration program in the Northern Cape.


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