JOHANNESBURG (miningweekly.com) – JSE-listed Kumba Iron Ore has reiterated its warning of plunging earnings as iron-ore prices hurt the bottom line.
Kumba, which would release its results for the 2015 financial year on February 9, noted in an updated trading statement on Tuesday that its headline earnings would be between R3.6-billion and R3.8-billion and its basic earnings between R440-million and R487-million.
This was down from the headline and basic earnings of R11-billion and R10.7-billion respectively in the prior year.
Headline earnings per share (HEPS) would be 65% to 67% lower at between R11.45 and R12.05 apiece, compared with the R34.32 achieved in the preceding year, while basic earnings per share (BEPS) would decline 95% to 96% from R33.44 last year to between R1.37 and R1.52 in the 12 months under review.
A R6-billion pretax impairment charge relating to Kumba’s Sishen mine, in the Northern Cape, had been included in the reported basic earnings.
The company said the deteriorating iron-ore price environment had necessitated a reconfiguration of the Sishen pit to a lower cost shell.
The Sishen Iron Ore Company last week started a retrenchment consultation process with employees and trade unions, with up to 3 933 employees and contractors expected to be affected.
The HEPS and BEPS also included the derecognition of a deferred tax asset of R617-million, as well as a R232-million gain realised on a finance lease receivable.