Kumba Iron Ore Limited

Kumba reported headline earnings per share of ZAR 0.24 and declared a dividend of ZAR 7.90 per share. External factors reduced EBITDA by 30% to ZAR 10.9 billion from roughly ZAR 16 billion in the prior period, with a total ZAR 5.1 billion impact driven mainly by currency and price moves; input-cost inflation, especially diesel and explosives, also weighed on results. Realized price was ZAR 90 per tonne versus ZAR 91 a year ago, and total production decreased 3%, while sales volumes were 1% lower and rail volumes to the port were 2% lower. For 2026, management kept production guidance at 31 million to 33 million tonnes, sales guidance at 35 million to 37 million tonnes, C1 unit cost guidance at $45 per tonne, and CapEx guidance at ZAR 13.2 billion to ZAR 14.2 billion.

Nompumelelo Zikalala framed the half as one defined by external headwinds rather than execution failure, pointing to record rainfall, higher energy and diesel costs, and exchange-rate pressure as the main drags. She emphasized that the company controlled what it could: safety, recovery planning, logistics coordination, and progress on strategic projects. Her tone was confident and forward-looking, repeatedly stressing that Kumba is entering the second half better positioned for production, logistics improvement, and the next phase of UHDMS.

Xolani Mbambo said the half was shaped by four main factors: a stronger rand, softer iron ore pricing, inflation in Kumba’s cost base, and lower sales volumes due to Transnet maintenance. He noted realized price of ZAR 90 per tonne, EBITDA of ZAR 10.9 billion, and headline EPS of ZAR 0.24, while explaining that external factors accounted for more than 90% of the ZAR 5.1 billion EBITDA impact. He also highlighted unit cash cost performance: Sishen at ZAR 549 per tonne and Kolomela at $24 per tonne, both within or ahead of guidance, and said first-half CapEx of ZAR 5.2 billion was below the midpoint of the full-year range. On capital allocation, he said the company started from net cash of ZAR 14.9 billion, generated ZAR 9.9 billion from operations, paid ZAR 6.5 billion for the final dividend, funded ZAR 1.3 billion of UHDMS spend, and ended with net cash of ZAR 8.7 billion after declaring an interim dividend of ZAR 3.4 billion.

Analysts focused on rail rehabilitation, freight rates, UHDMS execution risk, the financial impact of the shutdown, breakeven pressure, and Kolomela strip ratios. Management said 101 kilometers of rail were replaced in the first half, but more work is still needed to get back toward the roughly 500 kilometers identified by the technical assessment, and the next shutdown will be planned with Transnet. On freight, they said spot rates have been volatile, recently around $24 after moving as high as $30, and confirmed Kumba does not hedge freight, though it has some vessel ownership. On UHDMS, management said the biggest remaining risk is the tie-in period, but that detailed engineering is 96% complete, procurement is done, and extra work has been pushed ahead to reduce shutdown risk.