Kumba profit declines as much as 63%

Johannesburg - Kumba Iron Ore [JSE:KIO], Africa’s biggest producer of the steelmaking ingredient, said first-half profit fell as much as 63% after prices of the steelmaking ingredient declined.

So-called headline earnings, which exclude one-time items, will drop to a range of R2.4bn and R2.6bn or R7.50 and R8.05 a share, in the six months through June 30 from R6.51bn, or R20.28, a year earlier, Anglo American [JSE:AGL] said in a statement on Wednesday.

“The significant decrease in export iron-ore prices is largely responsible for the decrease in earnings,” the company said.

Iron ore dropped 37% in the year ended June 30 due to a surplus that emerged after the largest miners including Rio Tinto Group, BHP Billiton [JSE:KIO] and Fortescue Metals Group invested billions of dollars to boost output, exacerbating a glut as China, the biggest buyer, grew at the slowest pace in more than two decades.

Kumba pared earlier gains of as much as 4.6% and traded 3.4% higher at R128.42 by 13:16 on the JSE.