Wrap Text
Reviewed interim results for the six months ended 30 June 2017 and cash dividend declaration
KUMBA IRON ORE LIMITED
JSE code: KIO
ISIN: ZAE000085346
(‘Kumba’ or ‘the Company’ or ‘the group’)
Reviewed interim results for the six months ended 30 June 2017 and cash dividend declaration
KEY FEATURES
- Fatality free and reduced lost-time injuries
- Productivity improvement resulted in production of 21.9 Mt, up 23%
- Improved financial performance with strong cash generation
- Revenue of R21.5 billion, up 22%
- Headline earnings of R4.6 billion, R14.42 per share, up 53%
- Balance sheet strengthened with net cash of R13.5 billion
- Dividend reinstated - R15.97 per share interim cash dividend
Commentary
SAFETY
The focus on safety remains a key priority for the group. The continuous effort in our safety performance included an
emphasis on leadership, operational risk management and implementation of critical controls, which have resulted in
encouraging improvements reflected in our leading indicator reporting. No fatalities were recorded during the first half
of 2017. The total recordable case frequency rate, a measure of frequency of injuries, was 0.73 (1H16: 0.83) and the
lost-time injury frequency rate (LTIFR) decreased to 0.23 (1H16: 0.27).
SIGNIFICANT IMPROVEMENT IN PRODUCTIVITY AND EFFICIENCIES DELIVERED
Themba Mkhwanazi, Chief executive of Kumba, notes, “I am pleased to report that Kumba has delivered on our key
objectives set for the first half. Kumba was fatality free and improved significantly on all key safety indicators. Our
operational performance was again encouraging, with another step change in productivity from the revised Sishen mine plan
and enhanced fleet efficiencies. This resulted in a 23% improvement in production.
“Stronger operational performance and commodity prices resulted in the operating margin improving to 36% from 29% in
1H16, and headline earnings increasing 53%. Cash flow conversion was strong with operating free cash flow up 48% to
R8.3 billion resulting in a robust R13.5 billion net cash position. This has enabled us to resume dividend payments,
with an interim dividend of R5.1 billion declared representing R15.97 per share. While the overall progress has been
very encouraging, substantial effort was required simply to offset cost inflation and there is no room for complacency.
The team is therefore examining every aspect of the value chain in order to improve Kumba’s ability to endure any future
price volatility.”
DIVIDEND REINSTATED
The Board has decided to resume paying a dividend, in accordance with the Board’s policy of returning excess cash to
shareholders, whilst retaining a high level of balance sheet flexibility. A conservative approach remains critical in
the context of an ongoing volatile price environment.
Taking cognisance of the uncertain environment, but also recognising the strong cash balance built up by the group,
the Board has decided to pay an interim cash dividend of R15.97 per share.
The dividend policy remains under review and the Board will continue to assess the Company’s requirements at each
interim and annual reporting period, taking into account the prevailing risks and opportunities, as well as the future
earnings outlook.
REGULATORY UPDATE
The Reviewed Mining Charter (MCIII)
On 15 June 2017, the South African Department of Mineral Resources (DMR) published its Reviewed Mining Charter 2017
(MCIII). Kumba has expressed its concern that, unlike the collaborative process for agreeing the 2004 and 2010 Mining
Charters, the MCIII was not concluded through agreement between the DMR and all relevant stakeholders, including the
mining industry, despite the best efforts of those stakeholders over the preceding year. Unfortunately, the practical
experience of the mining industry in implementing the previous Mining Charters - which themselves have contributed to the
achievement of the significant transformation that exists across the South African mining industry today - was not taken
into account in the development of MCIII.
Kumba is supportive of the legal course of action being followed by the Chamber of Mines, with the ultimate objective
of arriving at a negotiated solution that is practical to implement, and that preserves and enhances investment in what
is a critically important industry for South Africa. In the absence of new investment, South Africa will fail to deliver
the economic growth required to create greater levels of employment and socio-economic upliftment for the benefit of
all South Africans. Kumba is committed to meeting South Africa’s transformation objectives and has been a longstanding and
major contributor to the country’s transformation.
On 14 July 2017, the Chamber of Mines advised that the Minister of Mineral Resources has given a written undertaking
that the Minister and the DMR will not implement or apply the provisions of the 2017 Reviewed Mining Charter in any way,
pending judgment in the urgent interdict application brought by the Chamber of Mines. Kumba welcomes the undertaking
and will continue to engage through the Chamber of Mines.
Sishen consolidated mining right granted
An application, in terms of Section 102 of the Mineral and Petroleum Resources Development Act No 28 of 2002, to
extend Sishen mine’s mining right by the inclusion of the adjacent Sishen Iron Ore (Pty) Ltd (SIOC) Prospecting Rights
(including Dingleton) and other properties, was lodged on 1 July 2016. This application is required by Sishen mine to expand
its current mining operations within the adjacent Dingleton area. The official grant letter was received from the DMR on
6 July 2017 and the process to amend the Sishen mining right, will now proceed. Mining operations will only commence once the
required environmental authorisation, in terms of the National Environmental Management Act 1998 (Act 107 of 1998), has been
approved, which is expected soon.
Thabazimbi transfer to ArcelorMittal SA
SIOC and ArcelorMittal SA announced in 2016 that they had entered into an agreement to transfer Thabazimbi mine to
ArcelorMittal SA, subject to the fulfilment of certain conditions. If these conditions are not satisfied by 31 August 2017
(the later date agreed to by the companies), the agreement will lapse and SIOC will proceed with the closure of the
mine.
The agreement is expected to become effective in the second half of 2017, at which time the employees, assets and
liabilities will transfer to ArcelorMittal SA at a nominal purchase consideration plus the assumed liabilities of which 97%
is already ArcelorMittal SA’s contractual liability. These liabilities include the mine’s social closure plan based on
the identified needs of the Thabazimbi community. The transfer will simplify the current arrangement by making
ArcelorMittal SA solely responsible for Thabazimbi’s closure and rehabilitation. The Thabazimbi mine assets and related
liabilities that will transfer have been presented separately in the balance sheet as assets and liabilities of the disposal
group held for sale at 30 June 2017 (refer to note 9 in the condensed consolidated financial statements).
MARKET OVERVIEW
The Platts 62%Fe CFR index reached US$95.05 per tonne in February, the highest level since August 2014, driven by
Chinese New Year restocking and rising steel prices. Iron ore prices have subsequently fallen and ended the first half of
the year at US$63 per tonne. Economic activity in China remained buoyant, with a rise in domestic steel prices and
improved margins prompting mills to ramp-up capacity and boosting demand for iron ore. Strengthening iron ore prices have
resulted in high cost supply coming back into the market, with iron ore supply from high cost seaborne suppliers, primarily
from India, increasing 20% year-on-year.
The lump premium started the year at 10 US cents/dmtu and ended the first half at 21 US cents/dmtu, reaching an
historic low of almost 2 US cents/dmtu in April. The recent rally in premiums is on the back of lower availability of lump
product at Chinese ports and record mill margins, incentivising a renewed focus on productivity and supporting demand for
direct charge material.
Underlying steel production and iron ore demand remained relatively strong during the first six months of the year but
a tempering in steel demand is expected in the second half. Rising iron ore stock levels at Chinese ports, combined
with a number of growth projects coming on line, is anticipated to put pressure on iron ore prices during the next
six months.
Overview of six months ended 30 June 2017
Total tonnes mined were 125 Mt, a 13% increase. Total production increased to 21.9 Mt with significant productivity
improvements at Sishen helping to deliver 15.6 Mt and a continued solid performance at Kolomela delivering 6.3 Mt. Total
sales volumes increased by 5% to 21.2 Mt (1H16: 20.2 Mt) on the back of export sales of 19.5 Mt (1H16: 18.1 Mt) due to
higher production.
Kumba achieved an average cash break-even price of US$43/tonne (CFR China) in the first six months of 2017, an
increase of US$14/tonne from the average for the full year 2016. Controllable costs increased by US$1/tonne as a result
of a US$2/tonne increase from mining cost inflation and higher waste mining volumes, partially offset by a further
reduction in controllable overhead costs of US$1/tonne through continued cost optimisation. Uncontrollable costs increased
as a result of higher freight rates (US$3/tonne) and lower lump and market premiums (US$5/tonne), higher mineral royalties
(US$1/tonne) and a stronger currency which added US$4/tonne.
Headline earnings increased by 53% to R4.6 billion (1H16: R3 billion), mainly as a result of the 29% increase in the
average realised iron ore export price to US$71/tonne (1H16: US$55/tonne), and 5% higher total sales volumes.
Attributable and headline earnings for the period were R14.37 and R14.42 per share respectively.
OPERATIONAL PERFORMANCE
Production summary (unreviewed)
Six months ended
’000 tonnes June June % change
2017 2016
Total 21,854 17,788 23
Lump 14,483 11,391 27
Fines 7,371 6,397 15
Mine production 21,854 17,788 23
Sishen mine 15,551 11,541 35
DMS plant 9,705 6,727 44
Jig plant 5,846 4,814 21
Kolomela mine 6,303 5,877 7
Thabazimbi mine - 370 -
Sishen mine
The successful execution of the restructuring and mine plan redesign has increased the mine’s flexibility and improved
the run rates on key operating parameters. The new mine plan, Operating Model and significant fleet productivity gains
of 57% helped drive Sishen’s improved performance. Sishen focused on increased operator training and equipment direct
operating hours (DOH) through higher attendance rates, changed shift patterns and more accountability at supervisory
levels. Through these measures and a committed workforce, the mine has been able to reduce its reliance on contractors
and as productivity rises, this trend is expected to continue. In the pit, wider benches, changed blast sizes and improved
shovel productivity contributed to the increase in mining volumes. Better shovel and truck DOH have added an extra five
production hours per day. Implementation of the Operating Model has resulted in an 84% improvement in mine to plan
compliance since 2015.
As a result, total tonnes mined at Sishen increased by 11% to 92.9 Mt (1H16: 83.7 Mt) with 39% less trucks. As per the
plan, the mine’s stripping ratio increased to 4.7 for the six months, compared to 3.5 for the same period in 2016.
Production increased by 35% to 15.6 Mt (1H16: 11.5 Mt) due to a combination of increased plant throughput and higher
yields. Waste mined was 76.6 Mt, an 18% increase for the period. Higher than normal levels of rainfall impacted
performance in 1Q17 but the tonnages were recovered in the second quarter.
Kolomela mine
Kolomela production was impeded by rain and weather delays in 1Q17, but improved substantially in the second quarter
to remain on track to achieve full year guidance. Productivity and efficiencies of the Kolomela drill fleet increased by
20% with the introduction of automated drilling technology. The Operating Model implementation has been responsible for
a 7.6% improvement in DSO plant throughput.
Total tonnes mined increased by 21% to 32.2 Mt, (1H16: 26.7 Mt). Waste mined was 25.4 Mt (1H16: 20.2 Mt), an increase
of 26%, as planned. The mine produced 6.3 Mt of ore (1H16: 5.9 Mt), a 7% increase, from 3% more ex-pit ore, benefiting
from stockpiled material.
Operating Model
The implementation of the Operating Model continues to yield operational efficiency improvements. The stabilised
roll-outs at the Kolomela plant and Sishen shovel maintenance area continue to demonstrate the benefits from the completed
implementations. The model ensures more stable operations, reduced variability and enhanced capability and efficiency,
providing a structured approach for continuous improvement.
Logistics
Despite severe weather disruptions at port and rail, Kumba’s volumes railed on the Sishen-Saldanha Iron Ore Export
Channel increased by 14% to 20.8 Mt (1H16: 18.3 Mt), as a result of increased production.
Kumba shipped 19.5 Mt (1H16: 18.1 Mt) from the Saldanha port destined for the export market, an increase of 8%,
including 0.2 Mt shipped through the multi-purpose terminal (MPT) at the Saldanha port.
Sales summary (unreviewed)
Six months ended
’000 tonnes June June % change
2017 2016
Total 21,234 20,210 5
Export sales 19,477 18,106 8
Domestic sales 1,757 2,104 (16)
Sishen mine 1,757 1,416 (24)
Thabazimbi mine - 688 -
Sales
Total sales increased by 5% to 21.2 Mt (1H16: 20.2 Mt), as export sales volumes of 19.5 Mt (1H16: 18.1 Mt), including
0.3 Mt from third party producers, were aided by higher production levels. CFR sales accounted for 65% of export sales
volumes (1H16: 70%). Finished product inventory held at the mines and ports increased from 2.3 Mt to 4.4 Mt. China
accounted for 60% (1H16: 65%) of Kumba’s export sales portfolio while the share of EU/MENA/Americas region increased to
20%, as Kumba further diversified its customer portfolio in the region. The group’s lump:fine ratio was 63:37 for the
period (1H16: 63:37).
FINANCIAL RESULTS
Revenue
The group’s total revenue from continuing operations increased by 22% to R21.5 billion for the period compared to
R17.6 billion for the comparable period in 2016, mainly as a result of the 29% increase in the average realised iron ore
export price to US$71/tonne (1H16: US$55/tonne), and 5% higher total sales volumes. These gains were partially offset by
the strengthening of the average Rand/US$ exchange rate (1H17: R13.21/US$1 compared to 1H16: R15.40/US$1). Firmer freight
rates resulted in a R652 million increase in shipping revenue.
Kumba’s FOB achieved prices improved by US$16/tonne compared to 1H16, driven by stronger average iron ore index prices
offsetting impacts of higher freight rates and lower lump premiums. The average 62% Platts index increased by US$22/tonne,
whilst the lump premium decreased by US$3/tonne and freight rates increased by US$5/tonne compared to 2016. The FOB
achieved price increased by US$2/tonne due to pricing our China sales in the month of arrival.
Average lump premiums increased by 76% to US$0.08/dmtu in 2Q16 from that of the first quarter, on the back of
increased demand for direct charge material supported by stronger steel prices. However, the first half average of
US$0.07/dmtu is 53% lower than the 1H16 average of US$0.15/dmtu.
Operating expenses
Operating expenses increased by 11% to R13.8 billion compared to R12.4 billion in the first half of 2016; principally
as a result of the 23% increase in production volumes and inflationary pressure on input costs. This was partially
offset by saving on mining costs from productivity measures, savings from overhead reductions, reduced use of contractors and
lower diesel prices. Selling and distribution costs remained flat despite the 14% increase in sales volumes railed.
R444 million higher freight costs were incurred due to the Platts freight rate on the Saldanha-Qingdao route
increasing to US$10/wmt. Spot freight rates averaged US$9.91/tonne, an 87% increase from US$5.29/tonne in 1H16.
Cost savings were achieved through continued aggressive management of overheads and by focusing on high value project
and technical studies, partially offset by inflation.
Unit cash costs at Sishen mine increased by 5% to R311 per tonne (FY16: R296 per tonne) primarily a result of 10%
higher waste mining volumes and inflationary cost pressure, partially offset by productivity gains in mining and processing
activities which resulted in an increase in production volumes, and higher deferred waste stripping costs capitalised,
driven by a higher stripping ratio of 4.7. Kolomela mine incurred unit cash costs of R252 per tonne (FY16: R201 per tonne),
a 25% increase from higher mining volumes, above inflationary pressures from higher fuel prices, and the costs
incurred for the crushing of feedstock material for the modular plant.
Operating profit
Kumba’s operating profit margin increased by 7 percentage points to 36% (1H16: 29%). The group’s mining operating
margin increased to 39% (1H16: 32%), excluding the net freight loss incurred on shipping operations mainly as a result of
long-term fixed price chartering contracts. Operating profit increased by 50% to R7.7 billion (1H16: R5.2 billion).
Cash flow
The increased profitability on the back of higher average realised iron ore prices and increase in sales volumes
during the six months positively impacted the group’s cash generating ability. Cash flow generated from operations was
R11.7 billion (1H16: R7.6 billion). The group ended the period with a net cash position of R13.5 billion
(1H16: R548 million; 2H16: R6.2 billion). Capital expenditure of R1.1 billion was incurred, R0.2 billion on
stay-in-business (SIB) activities, R0.7 billion on deferred stripping, and R0.2 billion on expansions, which included
R137 million on the Dingleton project. The relocation of the remaining houses for the Dingleton project has progressed well
and is expected to be completed on schedule and within budget.
The group expects total capital expenditure for 2017 (including deferred stripping) to be in the range of R3.0 billion
to R3.1 billion.
ORE RESERVES AND MINERAL RESOURCES
There have been no material changes to the ore reserves and mineral resources as disclosed in the 2016 Kumba
Integrated Report.
EVENTS AFTER THE REPORTING PERIOD
There were no significant events that occurred from 30 June 2017 to the date of this report, not otherwise dealt with
in this report.
CHANGES IN DIRECTORATE
The following directors tendered their resignations from the Board during the period:
- Ms Zarina Bassa as an independent non-executive director with effect from 11 May 2017.
- Mr Andile Sangqu as a non-executive director, and shareholder representative of Anglo American, with effect from
24 March 2017.
- Ms Natascha Viljoen as a non-executive director, and shareholder representative of Anglo American, with effect from
24 March 2017.
- Mr Frikkie Kotzee as executive director with effect from 11 May 2017 following his resignation as Chief financial
officer of the group.
The Board thanks all four former directors for their contributions and guidance during their respective tenures and
wishes them all the best in their future endeavours.
The Board announced the following appointments to the Board:
- Mr Terence Goodlace as an independent non-executive director with effect from 24 March 2017.
- Mr Seamus French as a non-executive director and a shareholder representative of Anglo American with effect from
24 March 2017.
- Mr Stephen Pearce as a non-executive director and a shareholder representative of Anglo American with effect from
24 March 2017.
- Mr Sango Ntsaluba as an independent non-executive director of the Board and chairman of the Audit Committee, with
effect from 5 June 2017.
- Mr Bothwell Mazarura as Chief financial officer and executive director, effective 1 September 2017.
CHANGE IN MANAGEMENT
The Board announced the resignation of Ms Avanthi Parboosing as Company secretary with effect from 30 June 2017. The
Board expresses gratitude to Ms Parboosing for her valued contribution to the Company. Mr Itumeleng Lebepe was appointed
as acting Company secretary from 1 July 2017.
OUTLOOK
Sishen’s solid and consistent performance and ongoing improvements since the restructuring have resulted in guidance
being revised. Total production for 2017 is expected to be in the range of 41 - 43 Mt, with Sishen producing between
28 - 29 Mt of product and 155-165 Mt of waste. Kolomela is expected to produce 13 - 14 Mt in 2017, aided by further
improvements in plant efficiency and throughput rates. Waste guidance remains at 50 - 55 Mt for the year.
Export sales volumes are expected to be under pressure as a result of adverse weather conditions during the wet
Western Cape winter months, as well as the annual maintenance shutdown on the iron ore export channel during 2H17. Full year
sales guidance is 41 - 43 Mt. Domestic sales volumes of up to 6.25 Mt are contracted to ArcelorMittal SA in terms of the
supply agreement, however, 3 - 3.5 Mt is the expected volume for 2017.
Iron ore prices are expected to remain under pressure in the short to medium term. The group’s performance remains
sensitive to the volatility in iron ore export prices and the Rand/US$ exchange rate. Kumba will continue to optimise its
assets by stepping up financial and operational performance through an increased focus on extracting value from the
entire value chain enabling growth in free cash flow and returns. The Company will remain focused on maintaining a strong
balance sheet to provide flexibility in the face of price volatility.
The presentation of the Company’s results for the six months ended 30 June 2017 will be available on the Company’s website
www.angloamericankumba.com at 08:00 CAT and the webcast will be available from 11:30 CAT on 25 July 2017.
SALIENT FEATURES AND OPERATING STATISTICS
for the period ended
Unreviewed Unreviewed Unaudited
6 months 6 months 12 months
30 June 30 June 31 December
2017 2016 2016
Share statistics (’000)
Total shares in issue 322,086 322,086 322,086
Weighted average number of shares 319,219 319,826 319,521
Diluted weighted average number of shares 321,274 320,706 321,164
Treasury shares 2,882 3,003 2,798
Market information
Closing share price (Rand) 171 111 159
Market capitalisation (Rand million) 55,144 35,752 51,212
Market capitalisation (US$ million) 4,216 2,435 3,730
Net asset value attributable to owners of Kumba (Rand per share) 100.51 69.42 86.47
Capital expenditure (Rand million)*
Incurred 1,071 1,294 2,353
Contracted 451 806 644
Authorised but not contracted 2,377 2,719 2,208
Operating commitments*
Operating lease commitments 75 105 89
Shipping services 6,850 8,847 8,692
Economic information
Average Rand/US Dollar exchange rate (ZAR/US$) 13.21 15.40 14.69
Closing Rand/US Dollar exchange rate (ZAR/US$) 13.08 14.68 13.73
Sishen mine FOR unit cost
Unit cost (Rand per tonne) 391.63 480.20 412.04
Cash cost (Rand per tonne) 311.40 326.90 296.19
Unit cost (US$ per tonne) 29.65 31.18 28.05
Cash cost (US$ per tonne) 23.57 21.23 20.16
Kolomela mine FOR unit cost
Unit cost (Rand per tonne) 346.28 253.79 283.42
Cash cost (Rand per tonne) 252.30 171.50 201.09
Unit cost (US$ per tonne) 26.21 16.48 19.29
Cash cost (US$ per tonne) 19.10 11.14 13.69
* The capital expenditure and operating commitments amounts shown above have been reviewed.
CONDENSED CONSOLIDATED BALANCE SHEET
as at
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million Notes 2017 2016 2016
Assets
Property, plant and equipment 3 31,651 32,680 32,131
Biological assets 3 10 2
Investments held by environmental trust 580 844 559
Long-term prepayments and other receivables 126 547 84
Inventories 3,533 2,518 2,889
Deferred tax assets - 1 87
Non-current assets 35,893 36,600 35,752
Inventories 3,449 4,305 4,604
Trade and other receivables 2,579 2,992 5,253
Cash and cash equivalents 13,486 5,048 10,665
Current assets 19,514 12,345 20,522
Assets of disposal group classified as held for sale 9 1,118 - 938
Total assets 56,525 48,945 57,212
Equity
Shareholders’ equity 4 32,374 22,360 27,850
Non-controlling interests 10,081 6,754 8,686
Total equity 42,455 29,114 36,536
Liabilities
Interest-bearing borrowings 5 - 4,500 4,500
Provisions 2,051 2,931 1,967
Deferred tax liabilities 7,362 7,860 7,462
Non-current liabilities 9,413 15,291 13,929
Provisions 19 518 164
Trade and other payables 3,298 2,696 3,741
Current tax liabilities 353 1,326 1,906
Current liabilities 3,670 4,540 5,811
Liabilities of disposal group classified as held for sale 9 987 - 936
Total liabilities 14,070 19,831 20,676
Total equity and liabilities 56,525 48,945 57,212
CONDENSED CONSOLIDATED INCOME STATEMENT
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
Rand million Notes 2017 2016 2016
Revenue 21,500 17,566 40,155
Operating expenses (13,761) (12,411) (24,881)
Operating profit 6 7,739 5,155 15,274
Finance income 321 75 295
Finance costs (206) (305) (496)
Share of profit of equity accounted
joint venture - - 2
Profit before taxation 7,854 4,925 15,075
Taxation (1,784) (1,146) (3,934)
Profit for the year from continuing operations 6,070 3,779 11,141
Discontinued operations
(Loss)/profit from discontinued operations 9 (72) 41 3
Profit for the year 5,998 3,820 11,144
Attributable to:
Owners of Kumba 4,586 2,974 8,621
Non-controlling interest 1,412 846 2,523
5,998 3,820 11,144
Basic earnings/(loss) per share attributable
to the ordinary equity holders of Kumba
(Rand per share)
From continuing operations 14.59 9.20 26.97
From discontinued operations (0.22) 0.10 0.01
Total basic earnings per share 14.37 9.30 26.98
Diluted earnings/(loss) per share attributable
to the ordinary equity holders of Kumba
(Rand per share)
From continuing operations 14.49 9.17 26.83
From discontinued operations (0.22) 0.10 0.01
Total diluted earnings per share 14.27 9.27 26.84
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
Rand million 2017 2016 2016
Profit for the period 5,998 3,820 11,144
Other comprehensive loss for the year, net of tax (70) (57) (233)
Exchange differences on translation of foreign operations1 (70) (57) (233)
Total comprehensive income for the year 5,928 3,763 10,911
Attributable to:
Owners of Kumba 4,533 2,930 8,442
Non-controlling interest 1,395 833 2,469
5,928 3,763 10,911
1 There is no tax attributable to items included in other comprehensive income and all items will be subsequently
reclassified to profit or loss.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
Rand million 2017 2016 2016
Total equity at beginning of year 36,536 25,167 25,167
Changes in share capital and premium
Treasury shares issued to employees under employee share
incentive schemes 82 127 197
Purchase of treasury shares (61) (180) (180)
Changes in reserves
Equity-settled share-based payment 52 289 513
Vesting of shares under employee share incentive schemes (82) (127) (197)
Total comprehensive income for the year 4,533 2,930 8,442
Dividends paid - - -
Changes in non-controlling interest
Total comprehensive income for the year 1,395 833 2,469
Dividends paid - - -
Equity-settled share-based payment - 75 125
Total equity at end of year 42,455 29,114 36,536
Comprising
Share capital and premium (net of treasury shares) (93) (184) (114)
Equity-settled share-based payment reserve* 138 2,191 172
Foreign currency translation reserve 1,208 1,409 1,262
Retained earnings 31,121 18,944 26,530
Shareholders’ equity 32,374 22,360 27,850
Attributable to the owners of Kumba 32,374 21,452 27,850
Attributable to non-controlling interest - 908 -
Non-controlling interest 10,081 6,754 8,686
Total equity 42,455 29,114 36,536
Dividend (Rand per share)
Interim** 15.97 - -
Final n/a n/a n/a
* The second phase of the employee share ownership scheme, Envision, unwound in November 2016. On vesting, the
equity-settled share-based payment reserve was reclassified to retained earnings.
** The interim dividend was declared after 30 June 2017 and has not been recognised as a liability in this interim
financial report. It will be recognised in shareholders’ equity for the year ending 31 December 2017.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the period ended
Rand million Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
2017 2016 2016
Cash generated from operations 11,726 7,632 17,218
Income from investments - - 2
Net finance costs paid 130 (258) (319)
Taxation paid (3,334) (646) (3,363)
Cash flows from operating activities 8,522 6,728 13,538
Additions to property, plant and equipment (1,071) (1,294) (2,353)
Proceeds from the disposal of property, plant and equipment 21 3 9
Cash flows used in investing activities (1,050) (1,291) (2,344)
Purchase of treasury shares (61) (180) (180)
Net interest-bearing borrowings repaid (4,500) (3,705) (3,705)
Cash flows used in financing activities (4,561) (3,885) (3,885)
Net increase in cash and cash equivalents 2,911 1,552 7,309
Cash and cash equivalents at beginning of year 10,665 3,601 3,601
Foreign currency exchange gains on cash and cash equivalents (90) (105) (245)
Cash and cash equivalents at end of year 13,486 5,048 10,665
Headline earnings
for the period ended
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
2017 2016 2016
Rand million
Reconciliation of headline earnings
Profit attributable to owners of Kumba 4,586 2,974 8,621
Impairment charge - 4 4
Net loss on disposal and scrapping of property, plant and equipment 32 60 186
4,618 3,038 8,811
Taxation effect of adjustments (9) (19) (54)
Non-controlling interests in adjustments (6) (10) (33)
Headline earnings 4,603 3,009 8,724
Headline earnings (Rand per share)
Basic 14.42 9.41 27.30
Diluted 14.33 9.38 27.16
The calculation of basic and diluted earnings and headline earnings
per share is based on the weighted average number of ordinary shares
in issue as follows:
Weighted average number of ordinary shares 319,218,877 319,825,728 319,520,658
Diluted weighted average number of ordinary shares 321,274,112 320,705,715 321,163,523
The dilution adjustment of 2,055,235 shares at 30 June 2017 (30 June 2016: 879,987 and 31 December 2016: 1,642 865) is a
result of the vesting of share options previously granted under the various employee share incentive schemes.
Normalised earnings
for the period ended
Unreviewed Unreviewed Unaudited
6 months 6 months 12 months
30 June 30 June 31 December
2017 2016 2016
Rand million
Reconciliation of normalised earnings
Headline earnings attributable to owners of Kumba 4,603 3,009 8,724
Recognition of deferred tax asset - - (86)
4,603 3,009 8,638
Taxation effect of adjustments - - -
Non-controlling interest in adjustments - - 20
Normalised earnings 4,603 3,009 8,658
Normalised earnings (Rand per share)
Basic 14.42 9.41 27.10
Diluted 14.33 9.38 26.96
The calculation of basic and diluted normalised earnings
per share is based on the weighted average number of
ordinary shares in issue as follows:
Weighted average number of ordinary shares 319,218,877 319,825,728 319,520,658
Diluted weighted average number of ordinary shares 321,274,112 320,705,715 321,163,523
This measure of earnings is specific to Kumba and is not required in terms of International Financial Reporting Standards
or the JSE Listings Requirements. Normalised earnings represents earnings from the recurring activities of the group.
This is determined by adjusting the headline earnings attributable to the owners of Kumba for non-recurring expense or
income items incurred during the year. There were no adjusting items in the current period (30 June 2016: nil,
31 December 2016: R86 million).
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 30 June 2017
1. CORPORATE INFORMATION
Kumba is a limited liability company incorporated and domiciled in South Africa. The main business of Kumba,
its subsidiaries, joint ventures and associates is the exploration, extraction, beneficiation, marketing, sale and
shipping of iron ore. The group is listed on the JSE Limited (JSE).
The condensed consolidated interim financial statements of Kumba and its subsidiaries for the six months ended
30 June 2017 were authorised for issue in accordance with a resolution of the directors on 21 July 2017.
2. BASIS OF PREPARATION
The condensed consolidated interim financial statements have been prepared under the supervision of DJ Prins CA(SA),
acting Chief financial officer, in accordance with IAS 34 Interim Financial Reporting and the South African Companies
Act No 71 of 2008 and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and in compliance with the JSE Listings Requirements
for interim reports.
The condensed consolidated interim financial statements have been prepared in accordance with the historical cost
convention except for certain financial instruments, discontinued operations and disposal group held for sale, share-based
payments, and biological assets which are stated at fair value, and are presented in Rand, which is Kumba’s functional
and presentation currency. All financial information presented in Rand has been rounded off to the nearest million.
2.1. Accounting policies
The accounting policies and methods of computation applied in the preparation of these condensed consolidated
interim financial statements are in terms of International Financial Reporting Standards and are consistent with
those accounting policies applied in the preparation of the previous consolidated annual financial statements.
No new standards, amendments to published standards or interpretations which became effective for the year
commencing on 1 January 2017 had an effect on the reported results or the group accounting policies. The group
did not early adopt any new, revised or amended accounting standards or interpretations.
2.2. Going concern
In determining the appropriate basis of preparation of the condensed consolidated interim financial statements,
the directors are required to consider whether the group can continue in operational existence for the foreseeable
future. The financial performance of the group is dependent upon the wider economic environment in which the group
operates. Factors exist which are outside the control of management which can have a significant impact on the
business, specifically the volatility in the Rand/US$ exchange rate and the iron ore price.
These condensed consolidated interim financial statements are prepared on a going concern basis. The Board is
satisfied that the group is sufficiently liquid and solvent to be able to support the current operations for the
next 12 months.
2.3. Accounting judgements, estimates and assumptions
In preparing these condensed consolidated interim financial statements, the significant judgements made by
management in applying the group’s accounting policies and the key sources of estimation uncertainty are consistent
with those applied to the consolidated financial statements for the year ended 31 December 2016.
2.4. Change in estimates
The measurement of the environmental rehabilitation and decommissioning provisions are a key area where management’s
judgement is required. The closure provisions are measured at the present value of the expected future cash flows
required to perform the rehabilitation and decommissioning. This calculation requires the use of certain estimates
and assumptions when determining the amount and timing of the future cash flows and the discount rate. The closure
provisions are updated at each balance sheet date for changes in these estimates.
The life of mine (LoM) plan on which accounting estimates are based only includes proved and probable ore reserves
as disclosed in Kumba’s 2016 annual ore reserves and mineral resources statement. The most significant changes in
the provision for 2017 arises from the change in the LoM for both Sishen and Kolomela. The effect of the change in
estimate of the rehabilitation and decommissioning provisions, which was applied prospectively from 1 January 2017,
is detailed below:
Reviewed Reviewed Audited
30 June 30 June 31 December
2017 2016 2016
Rand million
Increase/(decrease) in environmental rehabilitation provision 120 198 (3)
Increase in decommissioning provision 1 18 9
(Decrease)/increase in profit after tax attributable to the
owners of Kumba (66) 110 1
Rand per share
Decrease in earnings per share attributable to the owners of Kumba 0.21 0.34 -
The change in estimate from the decommissioning provision has been capitalised to the related property, plant and
equipment and as a result had no effect on profit or earnings per share.
3. PROPERTY, PLANT AND EQUIPMENT
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million 2017 2016 2016
31 December 2016
Capital expenditure 1,071 1,458 2,520
Comprising:
Expansion 197 340 856
Stay-in-business (SIB)* 218 652 1,343
Deferred stripping 656 466 321
Transfers from assets under construction to property, plant and equipment 663 855 2,392
* Included in the expenditure above is the non-cash addition of Rnil (30 June 2016: R164 million and
31 December 2016: R167 million) relating to the unguaranteed residual value under a finance lease.
Expansion capital expenditure comprised mainly of the expenditure on the Dingleton relocation project and Sishen’s
second modular plant. SIB capital expenditure to maintain operations was principally related to infrastructure to support
mining and plant operations.
4. SHARE CAPITAL AND SHARE PREMIUM
Reconciliation of share capital and share premium (net of treasury shares):
Rand million Reviewed Reviewed Audited
30 June 30 June 31 December
2017 2016 2016
Balance at beginning of period (114) (131) (131)
Net movement in treasury shares under
employee share incentive schemes 21 (53) 17
Purchase of treasury shares (61) (180) (180)
Shares issued to employees 82 127 197
Share capital and share premium (93) (184) (114)
Number of shares
Balance at beginning and end of period 322,085,974 322,085,974 322,085,974
Reconciliation of treasury shares held:
Balance at beginning of period 2,797,627 1,109,732 1,109,732
Shares purchased 284,194 2,140,891 2,140,891
Shares issued to employees under the
Long-Term Incentive Plan and Kumba Bonus
Share Plan (200,194) (247,892) (452,996)
Balance at end of period 2,881,627 3,002,731 2,797,627
All treasury shares are held as conditional awards under the Kumba Bonus Share Plan.
5. INTEREST-BEARING BORROWINGS
Kumba’s net cash position at the balance sheet dates was as follows:
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million 2017 2016 2016
Interest-bearing borrowings - (4,500) (4,500)
Cash and cash equivalents 13,486 5,048 10,665
Net cash 13,486 548 6,165
Total equity 42,455 29,114 36,536
Interest cover (times) - 16 36
Movements in interest-bearing borrowings are analysed as follows:
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million 2017 2016 2016
Balance at beginning of period 4,500 8,205 8,205
Interest-bearing borrowings raised - 30 30
Interest-bearing borrowings repaid (4,500) (3,735) (3,735)
Balance at end of period - 4,500 4,500
The group’s committed debt facilities of R12 billion (revolving facility) mature in 2020. At 30 June 2017, Rnil
(30 June 2016: R4.5 billion and 31 December 2016: R4.5 billion) of the committed facility had been drawn down. The group
had undrawn committed facilities of R12 billion (30 June 2016: R12 billion and 31 December 2016: R12 billion) and
uncommitted facilities of R8.3 billion (30 June 2016: R8.3 billion and 31 December 2016: R8.3 billion).
6. SIGNIFICANT ITEMS INCLUDED IN OPERATING PROFIT
Operating expenses is made up as follows:
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million 2017 2016 2016
Production costs 8,200 7,852 15,819
Movement in inventories 513 359 (368)
Finished products 16 733 84
Work-in-progress 497 (374) (452)
Cost of goods sold 8,713 8,211 15,451
Mineral royalty 648 234 963
Selling and distribution costs 2,659 2,674 5,379
Cost of services rendered - shipping 1,761 1,317 3,115
Sublease rent received (20) (25) (27)
Operating expenses 13,761 12,411 24,881
Operating profit has been derived after taking
into account the following items:
Employee expenses 1,796 1,797 3,498
Net restructuring cost 8 377 384
Share-based payment expenses 55 366 647
Depreciation of property, plant and equipment 1,497 1,496 3,089
Deferred waste stripping costs (656) (466) (321)
Net loss on disposal and scrapping of property,
plant and equipment 32 60 191
Gain on lease receivable - (164) (164)
Net finance losses/(gains) 170 8 (657)
Net (gains)/losses on derivative financial instruments
Realised - (90) (420)
Unrealised 42 (76) (570)
Net foreign currency (gains)/losses
Realised 208 156 286
Unrealised (51) 42 69
Fair value gains on investments held by the
environmental trust (29) (24) (22)
7. TAXATION
The group’s effective tax rate was 23% for the period (30 June 2016: 23% and 31 December 2016: 26%).
8. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Kumba Executive Committee.
The Kumba Executive Committee considers the business principally according to the nature of the products and services
provided, with the identified segments each representing a strategic business unit. ‘Other segments’ compromise
corporate, administration and other expenditure not allocated to the reported segments.
The total reported segment revenue compromises revenue from external customers, and is measured in a manner consistent
with that disclosed in the income statement. The performance of the operating segments are assessed based on earnings
before interest and tax (EBIT), which is consistent with ‘Operating profit’ in the financial statements. Finance
income and finance costs are not allocated to segments, as treasury activity is managed on a central group basis.
Total segment assets comprise finished goods inventory only, which is allocated based on the operations of the segment
and the physical location of the asset.
Depreciation, staff costs and additions to property, plant and equipment are not reported to the CODM per segment,
but are significant items which are included in EBIT and/or reported on for the group as a whole.
Products3 Services
Sishen Kolomela Thabazimbi Shipping
Rand million mine mine mine1 Logistics operations Other Total
Reviewed period ended 30 June 2017
Income statement
Revenue from external customers 14,462 5,344 - - 1,694 - 21,500
EBIT 7,933 2,864 (92) (2,659) (67) (332) 7,647
Significant items included in EBIT:
Depreciation 950 488 1 5 - 54 1,498
Staff costs 1,145 383 - 18 - 312 1,858
Balance sheet
Total segment assets 552 157 - - 807 61 1,577
Cash flow statement
Additions to property, plant and
equipment
Expansion capex 197 - - - - - 197
Stay-in-business capex 139 73 5 1 - - 218
Deferred stripping 550 106 - - - - 656
Reviewed period ended 30 June 2016
Income statement
Revenue from external customers 11,308 5,216 616 - 1,042 - 18,182
EBIT2 5,036 3,280 51 (2,675) (275) (211) 5,206
Significant items included in EBIT:
Depreciation 973 446 - 4 - 73 1,496
Staff costs 1,677 354 61 15 - 494 2,601
Balance sheet
Total segment assets 257 72 - 343 - 209 881
Cash flow statement
Additions to property, plant and
equipment
Expansion capex 313 27 - - - - 340
Stay-in-business capex 375 113 - - - - 488
Deferred stripping 340 126 - - - - 466
Products3 Services
Rand million Sishen Kolomela Thabazimbi Shipping Other Total
mine mine mine1 Logistics operations
Audited year ended 31 December 2016
Income statement
Revenue from external customers 26,644 10,764 612 - 2,747 - 40,767
EBIT2 14,194 6,539 41 (5,379) (370) 290 15,315
Significant items included in EBIT:
Depreciation 1,992 943 2 9 - 145 3,091
Staff costs 3,045 738 62 29 - 717 4,591
Impairment - - 4 - - - 4
Balance sheet
Total segment assets 606 163 - 651 - 58 1,478
Cash flow statement
Additions to property, plant and
equipment
Expansion capex 735 110 - - - 11 856
Stay-in-business capex 729 259 - 1 - 187 1,176
Deferred stripping 88 233 - - - - 321
1 The segment information above includes the results of Thabazimbi and therefore differs from the information presented
in the income statement.
2 After impairment charge.
3 Derived from extraction, production and selling of iron ore.
Geographical analysis of revenue and non-current assets
Rand million Reviewed Reviewed Audited
30 June 30 June 31 December
2017 2016 2016
Total revenue from external customers 21,500 18,182 40,767
South Africa 1,431 1,728 2,862
Export 20,069 16,454 37,905
China 11,962 11,086 25,054
Rest of Asia 4,209 3,185 7,730
Europe 3,326 2,183 4,846
Middle East and Africa 572 - 275
All non-current assets, excluding investments in associates and joint ventures, are located in South Africa, with the
exception of R5 million located in Singapore (30 June 2016: R20 million and 31 December 2016: R11 million), which
relates to prepayments.
9. DISCONTINUED OPERATIONS AND DISPOSAL GROUP HELD FOR SALE
All remaining plant operations at the Thabazimbi mine ceased on 31 March 2016 following the decision taken in 2015 to
close the mine. The Thabazimbi operation continues to be classified as a discontinued operation for the period ended
30 June 2017, separately from continuing operations, consistent with the periods ended 30 June 2016 and 31 December 2016.
Analysis of the result of the Thabazimbi mine is as follows:
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
Rand million 2017 2016 2016
Revenue - 616 612
Operating expenses (92) (565) (571)
Operating (loss)/profit (92) 51 41
Net finance income 1 5 4
(Loss)/profit before tax (91) 56 45
Income tax credit/(expense) 19 (15) (42)
(Loss)/profit after income tax of discontinued operation (72) 41 3
Attributable to owners of the parent (55) 32 2
Attributable to the non-controlling interest (17) 9 1
(Loss)/profit from discontinued operation (72) 41 3
Cash flow (utilised in)/generated from discontinued operations
Net cash flows (utilised in)/generated from operating activities (31) 374 279
Net cash (utilised)/generated by Thabazimbi (31) 374 279
As previously reported, SIOC and ArcelorMittal SA entered into an agreement for the transfer of the Thabazimbi mine,
together with the mining right, to ArcelorMittal SA. The agreement is expected to come into effect by 31 August 2017.
If all conditions precedent are not met by 31 August 2017 (the later date agreed between the parties), the agreement
will lapse and SIOC will proceed with closure of the mine.
The requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations have been considered and as a
result the Thabazimbi mine assets and liabilities that will transfer to ArcelorMittal SA have been presented as assets
and liabilities held for sale as at 30 June 2017, 30 June 2016 and 31 December 2016.
Assets and liabilities of disposal group held for sale at
Reviewed Reviewed Audited
30 June 30 June 31 December
Rand million 2017 2016* 2016
ASSETS
Property, plant and equipment 11 - 8
Biological assets 18 - 18
Investments held by environmental trust 308 - 296
Long-term prepayments and other receivables 559 - 515
Inventories 2 - 5
Trade and other receivables 220 - 96
Total assets 1,118 - 938
LIABILITIES
Non-current provisions 885 - 822
Current provisions 102 - 114
Total liabilities 987 - 936
Net carrying amount sold 131 - 2
* At 30 June 2016, Thabazimbi mine was classified as a discontinued operation and not as a disposal group held for sale.
No agreement existed between ArcelorMittal and SIOC to transfer Thabazimbi mine to ArcelorMittal at 30 June 2016, and
therefore the assets and liabilities were not disclosed as a disposal group held for sale.
10. RELATED PARTY TRANSACTIONS
During the period, Kumba, in the ordinary course of business, entered into various sale, purchase and service
transactions with associates, joint ventures, fellow subsidiaries, its holding company and Exxaro Resources Limited.
These transactions were subject to terms that are no less favourable than those offered by third parties.
Reviewed Reviewed Audited
6 months 6 months 12 months
30 June 30 June 31 December
Rand million 2017 2016 2016
Short-term deposits held with Anglo American SA Finance Limited1 (AASAF) 9,628 2,277 7,430
- Weighted average interest rate (%) 7.17 6.83 -
- Deposit - 2,277 7,430
- Weighted average interest rate (%) - 6.70 7.02
Interest earned on short-term deposits with AASAF during the year 299 60 262
Short-term deposit held with Anglo American Capital plc1 2,910 1,970 1,991
Interest earned on facility during the period 11 3 7
Interest paid on borrowings during the period - 7 7
Weighted average interest rate (%) - 8.16 8.16
Trade payable owing to Anglo American Marketing Limited1 (AAML) 374 186 195
Shipping services provided by AAML 1,788 1,299 3,107
1 Subsidiaries of the ultimate holding company.
11. FAIR VALUE ESTIMATION
The carrying value of financial instruments not carried at fair value approximates fair value because of the short period
to maturity or as a result of market-related variable interest rates.
The table below presents the group’s assets and liabilities that are measured at fair value:
Rand million Level 11 Level 22 Level 33
Reviewed 6 months - 30 June 2017
Investments held by the environmental trust 888 - -
Cash and cash equivalents
- Derivative financial assets - 107 -
- Derivative financial liabilities - (122) -
888 (15) -
Reviewed 6 months - 30 June 2016
Investments held by the environmental trust 844 - -
Derivative financial instruments
- Derivative financial assets - 96 -
- Derivative financial liabilities - (3) -
844 93 -
Audited 12 months - 31 December 2016
Investments held by the environmental trust 855 - -
Cash and cash equivalents
- Derivative financial assets - 615 -
- Derivative financial liabilities - (28) -
855 587 -
1 Level 1 fair value measurements are derived from unadjusted quoted prices in active markets for identical assets or
liabilities.
2 Level 2 fair value measurements are derived from inputs other than quoted prices included within level 1 that are
observable either directly or indirectly (i.e. derived from prices).
3 Level 3 fair value measurements are derived from valuation techniques that include inputs that are not based on
observable market data.
12. CONTINGENT LIABILITIES
The two matters which were reported as contingent liabilities at 31 December 2016, being the South African Revenue Service
matter and the matter regarding the Sishen municipal rates and taxes, were resolved during the interim period. There were
no contingent liabilities at 30 June 2017.
13. GUARANTEES
The total guarantees issued in favour of the DMR in respect of the group’s environmental closure liabilities at
30 June 2017 were R2.8 billion (30 June 2016: R2.8 billion and 31 December 2016: R2.8 billion). Included in this
amount are financial guarantees for the environmental rehabilitation and decommissioning obligations of the group to
the DMR in respect of Thabazimbi mine of R438 million (30 June 2016: R438 million and 31 December 2016: R438 million).
ArcelorMittal SA has guaranteed R730 million of this amount by means of bank guarantees issued in favour of SIOC.
As a result of the annual revision of closure costs, a shortfall of R450 million arose. Guarantees of the shortfall
will be issued in due course.
14. REGULATORY UPDATE
Mining Charter
Significant uncertainty remains around the Mining Charter III, released on 15 June 2017, which impacts future
empowerment of mining companies and granting of new mining rights.
On 14 July 2017, the Chamber of Mines advised that the Minister of Mineral Resources has given a written undertaking
that the Minister and the DMR will not implement or apply the provisions of the 2017 Reviewed Mining Charter in any
way, pending judgment in the urgent interdict application brought by the Chamber of Mines. Kumba welcomes the
undertaking and will continue to engage through the Chamber of Mines.
15. CORPORATE GOVERNANCE
The group subscribes to the Code of Good Corporate Practices and Conduct and complies with the recommendations of the
King III Report. In November 2016, the Board charter was aligned with the provisions of all relevant statutory and
regulatory requirements including among others, King IV. Full disclosure of the group’s compliance is contained in
the 2016 Integrated Report.
16. EVENTS AFTER THE REPORTING PERIOD
There have been no material events subsequent to 30 June 2017, not otherwise dealt with in this report.
17. INDEPENDENT AUDITORS’ REVIEW REPORT
The auditors, Deloitte & Touche, have issued their unmodified review report on the condensed consolidated interim
financial statements for the six months ended 30 June 2017. The review was conducted in accordance with ISRE 2410
Review of Interim Financial Information Performed by the Independent Auditor of the Entity.
The auditor’s report on the condensed consolidated interim financial statements is available for inspection at the
Company’s registered office.
Any reference to future financial performance included in this announcement has not been reviewed or reported on by
the Company’s auditors. The auditor’s report does not necessarily report on all the information contained in the
financial results. Shareholders are therefore advised that in order to obtain a full understanding of the review
engagement they should obtain a copy of the auditor’s report together with the accompanying financial information
from the registered office.
On behalf of the Board
F Titi TM Mkhwanazi
Chairman Chief executive
21 July 2017
Pretoria
NOTICE OF INTERIM CASH DIVIDEND
At its Board meeting on 21 July 2017, the directors approved a gross interim cash dividend of 1,597 cents per share on
the ordinary shares from profits accrued during the period ended 30 June 2017. The dividend has been declared from income
reserves.
The dividend will be subject to a dividend withholding tax of 20% for all shareholders who are not exempt from or do
not qualify for a reduced rate of withholding tax. The net dividend payable to shareholders after withholding tax at
a rate of 20% amounts to 1277.6 cents per share.
The issued share capital at the declaration date is 322,085,974 ordinary shares.
The salient dates are as follows:
Publication of declaration data Tuesday, 25 July 2017
Last day for trading to qualify and participate in the interim dividend
(and change of address or dividend instructions) Tuesday, 15 August 2017
Trading ex-dividend commences Wednesday, 16 August 2017
Record date Friday, 18 August 2017
Dividend payment date Monday, 21 August 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 16 August 2017 and Friday, 18 August
2017, both days inclusive.
By order of the Board
I Lebepe
Acting Company secretary
25 July 2017
Administration
REGISTERED OFFICE
Centurion Gate
Building 2B
124 Akkerboom Road
Centurion, 0157
Republic of South Africa
Tel: +27 12 683 7000
Fax: +27 12 683 7009
TRANSFER SECRETARIES
Computershare Investor Services (Proprietary) Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196, South Africa
PO Box 61051, Marshalltown, 2107
SPONSOR TO KUMBA
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
DIRECTORS
Non-executive: F Titi (chairman), DD Mokgatle, AJ Morgan, BP Sonjica,
TP Goodlace (British/South African), S French (Irish), NS Dlamini, SS Ntsaluba,
ST Pearce (Australian)
Executive: TM Mkhwanazi (chief executive)
ACTING COMPANY SECRETARY
I Lebepe
COMPANY REGISTRATION NUMBER
2005/015852/06
Incorporated in the Republic of South Africa
INCOME TAX NUMBER
9586/481/15/3
25 July 2017
OTHER SOURCES OF INFORMATION
Our website provides more information
on our Company and its performance.
www.angloamericankumba.com
A member of the Anglo American plc group
www.angloamerican.com
Date: 25/07/2017 08:04:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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