Covid shutdown bump in the road for Kumba production
JOHANNESBURG - Kumba Iron Ore yesterday reported production during the six months ended June had dropped 11percent as lockdown regulations since March had had an extensive impact on mining production.
Kumba, which produces iron ore, a steel-making ingredient, told investors output had fallen to 17.9million tons during the period compared to 20.1million tons a year earlier.
The unit of Anglo American plc said its operational performance reflected lower workforce levels in the second quarter of 2020 as guided by the South African government in response to the Covid-19 pandemic.
“Having shut down operations in response to the lockdown, Kumba re-opened its operations on March 27, 2020, following approval from the Department of Mineral Resources and Energy to operate at 50percent of workforce levels. With open cast mines permitted to return in phases to 100percent of operations from May 1, 2020, Kumba commenced with the ramp-up to 100 percent in June 2020,” said Kumba.
The company reported a 20 percent year-on-year decline in output to 8.5million tons during the June quarter. Despite the lower production, Kumba maintained its 2020 revised production guidance.
“Our ramp-up in run-rates are on track and revised guidance remain unchanged,” said Kumba.
In April Kumba revised its 2020 total sales guidance to between 38 and 40million tons and said total production would likely be between these parameters.
Kumba also said it was preparing to report a fall of up to 19 percent in headline earnings to between R8.13 billion and R8.55bn, down from R10.09bn a year earlier.
Headline earnings per share were likely to be between R25.37 and R26.68 a share compared with R31.51a share in June 2019, said the company.
Kumba expected basic earnings for the period to also fall by up to 19percent to between R8.146bn and R8.56bn, with basic earnings a share likely to be between R25.40 and R26.71 a share.
Kumba reported basic earnings and earnings per share of R10.05bn and R31.39, respectively.
Kumba shares closed 0.31percent higher at R512.28 on the JSE yesterday.
BUSINESS REPORT ONLINE