Kumba, the world’s fourth largest iron ore producer, said in its production and sales report for the period that the earnings were likely to be between R2.884billion and R3.033bn.
The company said basic earnings for the six months would be between R2.851bn and R2.998bn, a decrease of between 35 and 38percent. Headline earnings per share were expected to be between R9.02 and R9.49.
The group also revised its full-year total sales guidance to between 42 and 44million tons. The company attributed the reduction in forecasted tonnage to rail performance problems experienced in the six months ended June 30.
Kumba said it had trimmed the full-year production forecast “to more closely align to rail supply levels, as part of the integrated sales and operations planning drive and focus on optimal efficiency”.
It said it was working closely with Transnet to secure delivery of the contractual capacity and to mitigate further derailments.
The derailments affected Kumba’s export sales, which increased 1percent to 9.6million tons in the six months ended June 30.
Export sales fell 4percent compared to the first quarter. Derailments were also a factor in the 2017 financial year, despite the company reporting a 7percent increase in total shipments to 41.6million tons for the year.
Kumba said total production increased by 2percent year-on-year, largely thanks to improved operational performance from the Sishen and Kolomela mines.
It said Sishen’s waste stripping increased by 4percent to 44.4million tons, up from the 42.7million tons produced in the second quarter of last year.
Kumba kept the full-year guidance for waste stripping unchanged at between 170million tons and 180million tons. Kolomela’s production increased by 4percent to 3.6million tons, compared to 3.5million tons in the second quarter of last year.
Kumba shares closed 2.45percent lower on the JSE yesterday at R300.45.
- BUSINESS REPORT