COMPANIES: Kumba Iron Ore sales plummet 35% on Transnet’s meltdown, warns of annual earnings decline

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The costs of state-run logistics company Transnet’s meltdown are mounting. Kumba Iron Ore, a unit of Anglo American, said on Thursday that its sales in the fourth quarter (Q4) of 2022 fell 35% compared with the same period the year before, largely ...

Kumba said in its quarterly production report that Transnet was squarely to blame for the company’s poor Q4 performance as it also warned of an expected decline in full-year earnings.

The company went on to say that “the suboptimal logistics performance … has resulted in low levels of finished stock at Saldanha Port”. “The decrease in earnings for the period is largely attributable to the lower average realised FOB export ore price and lower sales volumes, partly offset by a weaker rand/US$ exchange rate,” the company said.Kumba’s share price rose more than 2% in morning trade on Thursday after the report and trading statement were released, but this likely stemmed from a more than 2% rise in the iron ore price. It also suggests that the traders and analysts were expecting something along these lines.

“Kumba’s premium product quality and geographically diverse customer base contributed to an average realised price of US$113 per wet metric tonne for the year, 13% above the benchmark price of US$100/wmt,” Zikalala said in the statement.

 

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