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S.Africa's Kumba Iron Ore 2018 headline earnings edge lower

JOHANNESBURG (Reuters) - South Africa's Kumba Iron Ore Ltd on Tuesday reported slightly lower full-year headline earnings for 2018, due to a dip in revenue and lower sales volumes.

The company, a unit of Anglo American, said headline earnings came in at 30.28 rand ($2.14) per share in the year ended Dec. 31, 2018, compared to 30.47 rand a year ago.

Headline EPS is the primary profit measure in South Africa, and strips out certain one-off items.

Revenues also fell by 1 pct to 45.7 billion rand.

The firm had reached a number of milestones in 2018, and achieved cost savings of 1 billion rand ($70.72 million) verses a target of 800 million rand, Kumba Chief Executive Officer Themba Mkhwanazi said in a statement.

"Alongside the solid performance achieved, Kumba has significant value to unlock," he said.

"While challenges are part of the uncertain environment that we operate in... we have the right strategy and teams in place to create sustainable shareholder value."

One such challenge facing the firm over 2018 was problems at state-run rail, port and pipeline firm Transnet, allegedly linked to state corruption and struggling financially.

Alongside seven train derailments, Kumba said it was affected by the closure of an iron ore export line after a truck collided with a bridge, prompting a 3.3 percent decline in the volumes of ore Kumba railed to port and a 4 percent decline in export sales volumes. The line has since reopened.

Kumba said it had improved engagement with Transnet, and continued to work with the company to increase efficiency and achieve maximum rail capacity.

The firm had already announced total production volumes would be four percent lower than 2017, at 43.1 million tonnes.

($1 = 14.1393 rand)

(Reporting by Emma Rumney; Editing by Shreejay Sinha and Rashmi Aich)

2019-02-19 09:30:29

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