Kumba Iron Ore (KIO) H1 2024 earnings summary

Executive summary

• Achieved resilient financial performance amid logistics and market headwinds, with EBITDA of R15.6 billion and a margin of 44% for H1 2024, supported by cost savings and operational reconfiguration.

• Safety performance improved, with total recordable injury frequency rate down to 0.94 from 1.2 year-over-year, though one fatality occurred.

• Production volumes were stable at 18.5 Mt, sales down 5% to 18.1 Mt, aligning with logistics constraints; full-year production and sales guidance maintained.

• Sustainability initiatives advanced, including reduced energy consumption, lower GHG emissions, and significant community investment.

• Kapstevel South project at Kolomela completed, delivering first ore in June 2024; UHDMS project paused for redesign.

Financial highlights

• Revenue decreased by 6% to R35.8 billion, with EBITDA at R15.6 billion (down 21%) and operating profit at R12.9 billion (down 26%).

• Attributable free cash flow rose to R9.1 billion, supported by cost optimization and working capital initiatives.

• Headline earnings per share were R22.27; interim dividend declared at R18.77 per share (R6 billion total payout, 85% payout ratio).

• Net cash position at period end was R14.6 billion.

• Capital expenditure for H1 2024 was R3.7 billion, with full-year guidance unchanged at R8-9 billion.

Outlook and guidance

• Full-year production guidance maintained at 35-37 Mt; sales guidance at 36-38 Mt, subject to logistics performance.

• C1 unit cost guidance remains at US$38/t; Sishen and Kolomela cash unit costs expected at R520–R550/dmt and R410–R440/dmt.

• CapEx guidance for the year is R8-9 billion.

• Focus areas for H2 include operational optimization, logistics system recovery, and progressing renewable energy and sustainability projects.