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Kumba expects FY17 earnings to soar as production improves

9th February 2018

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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JOHANNESBURG (miningweekly.com) -  Kumba Iron Ore's headline earnings for the year ended December 31 are likely to increase by 7% to 15% year-on-year to between R9.3-billion and R9.98-billion and its headline earnings per share (HEPS) to between R29.13 and R31.27.

"The increase in headline earnings is largely attributable to higher sales volumes on the back of an improved operational performance, as well as an increase in export iron-ore prices," the JSE-listed company said on Friday.

Meanwhile, the miner expects its basic earnings for the period to increase by 37% to 47% to between R11.79-billion and R12.6-billion and basic earnings per share (EPS) to between R36.94 and R39.65.

The improved operational performance at the Sishen mine, in the Northern Cape, as a result of improved levels of production and operating efficiencies, as well as the recovery in the price outlook for the iron-ore market, has necessitated an assessment of the recoverable amount of the Sishen mine.

This has resulted in an impairment reversal relating to Sishen mine of R4.8-billion (pre-tax). The impairment reversal, net of tax and noncontrolling interest, is R2.6-billion and will be included in basic earnings, but excluded from headline earnings.

Reported headline earnings and basic earnings for the prior comparative period were R8.72-billion and R8.62-billion respectively, while reported HEPS and EPS for the comparative period were R27.30 and R26.98 respectively.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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