HomeBase MetalsKumba expects 22% profit increase

Kumba expects 22% profit increase

Iron ore on the
conveyor at Kumba’s
Sishen mine
Johannesburg, South Africa — MININGREVIEW.COM — 14 July 2009 – Anglo American Plc’s Kumba Iron Ore Limited unit “’ the largest African producer of the steelmaking ingredient “’ says it expects it profits for the six months through to 31 June 2009 to climb by as much as 22 %.

Revealing this in a statement to the JSE, Pretoria-based Kumba said headline earnings would be between R3.35 billion and R3.45 billion, while earnings per share would be between R10.50 and R10.85. The company pointed out that this compared with earnings of R2.82 billion, or R8.90 per share, a year earlier.

Kumba’s earnings forecast is “not great,” said Andrew Joannou, a fund manager at Renaissance Specialist Fund Managers, by telephone from Cape Town. Iron ore sales prices could have been lower than expected and costs higher, he added.

Kumba rose 77 cents, or 0.5%, to R168.10 in Johannesburg trading, valuing the company at R53.7 billion. It has gained 3.8% this year, compared with a 4.5% advance in South Africa’s FTSE/JSE Africa All Share Index.

Bloomberg News reports that commodity prices, including iron ore, plunged in the second half of last year as the United States, European and Japanese economies slid into recession. Carmakers, consumer-goods manufacturers and builders have cut orders for steel, weighing on iron-ore demand.