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Kumba production and sales report for the fourth quarter, and trading statement, for the year ended 31 December 2019
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
Share code: KIO
ISIN: ZAE000085346
("Kumba" or "the Company")
Kumba production and sales report for the fourth quarter, and trading statement, for the year ended 31
December 2019
Production and sales report for the fourth quarter and year ended 31 December 2019
Kumba CEO, Themba Mkhwanazi, said "Kumba delivered a solid operational performance with total production of
42.4Mt and total sales of 42.2 Mt. This in line with the full-year guidance of 42-43Mt and 41.5-42.5Mt, respectively."
Production and sales volumes referred to are 100% of Sishen Iron Ore Company Proprietary Limited ("SIOC"),
and attributable to shareholders of Kumba as well as the non-controlling interests in SIOC.
Overview:
- Strong safety and sustainability focus, marking over three and a half years of fatality-free operations.
- Total sales for 2019 of 42.2Mt (2019 guidance: 41.5-42.5Mt) were 2% below 2018 as a result of lower off-take
from ArcelorMittal SA due to a decision to wind down operations at its Saldanha Steel plant. Export sales for
the year were flat at 40Mt, with an 8% quarter-on-quarter increase in Q4 2019 offsetting lower domestic sales.
- Total production of 42.4Mt for the year (2019 guidance: 42-43 Mt) decreased by 2%, primarily due to the
temporary closure of Kolomela's dense media separation (DMS) plant for an infrastructure upgrade. For Q4
2019, production increased by 12% to 11.8Mt, driven by improved performance at Sishen and the restarting
of the Kolomela DMS plant as scheduled.
- Total finished stock of 6.4Mt with 2.2Mt at Saldanha Port, ensures that Kumba is well positioned for Q1
2020.
Sales summary
%
change
% change % change 2018
Q4 Q4 vs Q4 Q3 vs Q3 vs
'000 tonnes 2019 2018 2018 2019 2018 2019 2018 2019
Total 10,713 11,591 (8) 10,154 6 42,218 43,257 (2)
Export sales 10,481 10,723 (2) 9,670 8 40,038 39,966 —
Domestic sales 232 868 (73) 484 (52) 2,180 3,291 (34)
Production summary
%
change
% change % change 2018
Q4 Q4 vs Q4 Q3 vs Q3 vs
'000 tonnes 2019 2018 2018 2019 2018 2019 2018 2019
Total 11,806 10,170 16 10,521 12 42,388 43,106 (2)
Sishen Mine 8,264 6,960 19 7,153 16 29,174 29,246 —
Kolomela Mine 3,542 3,210 10 3,368 5 13,213 13,860 (5)
Total sales of 42.2 Mt (2018: 43.3 Mt) decreased by 2%, driven by a 34% decline in domestic sales to 2.2Mt (2018:
3.3Mt) due to lower off-take by ArcelorMittal SA. Export sales volumes for 2019 were similar to 2018 at 40.0Mt.
Although rail performance improved significantly, shipments were hampered by single loading due to the
scheduled refurbishment of the second ship loader by Transnet. However, relative to Q3 2019, export sales
increased by 8.0% to 10.5Mt (Q3 2019: 9.7Mt), partially offsetting lower domestic sales. Compared to Q4 2018,
export sales decreased by 2% (Q4 2018: 10.7 Mt).
Total finished stock increased to 6.4Mt (Q4 2018: 5.3 Mt) as a result of lower domestic sales and the scheduled
port refurbishment. With 2.2Mt of stock at Saldanha Port, Kumba is well positioned for the first quarter of 2020.
Total production of 42.4Mt (2018: 43Mt) for the year reduced by 2% due to the temporary closure of Kolomela's
(DMS) plant for infrastructure upgrade from the first quarter of the year. Good progress was made in Q4 2019 with
production increasing by 12% to 11.8Mt compared to 10.5Mt in Q3 2019, and by 16% relative to 10.2Mt in Q4
2018. This reflects continued improvements in operational performance at Sishen following unscheduled
maintenance on the DMS plant in Q3 2019, as well as the ramp-up in production at Kolomela with the re-opening
of the DMS plant in Q4 2019 as scheduled.
Kumba's continuous drive towards new levels of P101 benchmark operational efficiency resulted in Sishen's waste
stripping increasing by 11% to 45.3Mt for the quarter (Q4 2018: 50.7Mt), with Kolomela's waste stripping remaining
relatively flat at 14Mt.
Kumba realised an average FOB iron ore export price of US$97/tonne (2018: US$72/tonne) for the year, on the
back of an average lump ratio of 67% and the average Fe quality of 64.2% Fe.
Trading statement for the year ended 31 December 2019
Kumba is currently finalising its financial results for the year ended 31 December 2019 ("the period"), which will
be released on the Johannesburg Stock Exchange News Service (“SENS”) on 18 February 2020.
In accordance with section 3.4(b) of the JSE Limited Listings Requirements, shareholders are advised that
headline earnings for the period are likely to be between R15,680 million and R16,826 million. Headline earnings
per share (HEPS) are likely to be between R48.93 and R52.47, an increase of between 62% and 73% from the
previous year ended 31 December 2018 ("comparative period"). Reported headline earnings and HEPS for the
comparative period (released on SENS on 19 February 2019) were R9,677 million and R30.28, respectively.
Basic earnings for the period are expected to be between R15,636 million and R16,776 million. Basic earnings
per share (EPS) are expected to be between R48.79 and R52.34, an increase of between 62% and 74%. Reported
basic earnings and EPS for the comparative period were R9,615 million and R30.08 respectively.
The increase in earnings for the period is largely attributable to the higher average realised FOB export ore price
and a weaker Rand/US Dollar exchange rate, relative to the comparative period. Further information will be
provided in the company's results for the period to be released on SENS on 18 February 2020.
The financial information on which this trading statement is based, has not been reviewed and reported on by the
Company’s external auditors.
Centurion
23 January 2020
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
For further information, please contact:
Company Secretary
Ms Fazila Patel
fazila.patel@angloamerican.com
Tel: +27 683 7063
Mobile: +27 83 297 2293
Investors Media
Penny Himlok Sinah Phochana
penny.himlok@angloamerican.com sinah.phochana@angloamerican.com
Tel: +27 12 622 8324 Tel: +27 12 683 7019
Mobile: +27 82 781 1888 Mobile: +27 76 066 0655
Notes to editors:
Kumba Iron Ore Limited, a member of the Anglo American plc group, is a leading value-adding supplier of high
quality iron ore to the global steel industry. Kumba produces iron ore in South Africa at Sishen and Kolomela mines
in the Northern Cape Province. Kumba exports iron ore to customers in a range of geographical locations around
the globe including China, Japan, Korea and a number of countries in Europe and the Middle East.
www.angloamericankumba.com
Anglo American is a leading global mining company and our products are the essential ingredients in almost every
aspect of modern life. Our portfolio of world-class competitive mining operations and undeveloped resources
provides the metals and minerals that enable a cleaner, more electrified world and that meet the fast growing
consumer-driven demands of the world’s developed and maturing economies. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover new resources and mine, process,
move and market our products to our customers around the world - safely, responsibly and sustainably.
As a responsible miner - of diamonds (through De Beers), copper, platinum group metals, iron ore, coal and nickel
- we are the custodians of what are precious natural resources. We work together with our business partners and
diverse stakeholders to unlock the sustainable value that those resources represent for our shareholders, the
communities and countries in which we operate, and for society as a whole. Anglo American is re-imagining mining
to improve people’s lives.
www.angloamerican.com
Date: 23-01-2020 09:00:00
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