Kumba Iron Ore (KIO) H2 2024 earnings summary

Executive summary

• Achieved record safety performance with TRIFR at 0.76, a 22% improvement year-over-year, and maintained a fatality-free year.

• Delivered strong operational performance and cost discipline, with production stable at 35.7Mt and significant cost savings of R4.4bn.

• Progressed UHDMS project, extending Sishen's life of mine to 2044 and supporting premium product strategy.

• Distributed over R57bn in value to stakeholders, including employees, communities, government, and shareholders.

• Maintained strong sustainability record with zero major environmental incidents for over nine years.

Financial highlights

• Adjusted EBITDA declined to R28.1bn, with a margin of 41%, mainly due to a 21% decrease in realised iron ore prices to US$92/t.

• Attributable free cash flow reached R14.5bn, supported by R4.4bn in cost savings and R7.7bn in working capital release.

• Headline earnings per share at R38.94; total dividend of R38.67 per share, equating to a 100% payout ratio and 12% yield.

• Revenue decreased 21% to R68.5bn, reflecting lower average realised FOB price.

• CapEx totaled R9bn, including R1.3bn for expansion and R4.5bn for sustaining capital.

Outlook and guidance

• 2025 production and sales guidance maintained at 35–37Mt, with C1 unit cost guidance at US$39/t and capex of R9.5–10.5bn.

• UHDMS project on track for phased delivery through 2029, targeting >30% IRR and >50% EBITDA margin.

• Ongoing cost savings targeted at R2.5–3bn for 2025 to offset inflation and maintain flat unit costs.

• Focus on logistics network reform and Ore Export Corridor restoration in collaboration with government and Transnet.

• Long-term fundamentals for premium lump ore remain strong, with structural drivers supporting higher quality premia.