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Ka-ching again: Kumba’s dividend up 69% as another An...

Business Maverick


Ka-ching again: Kumba’s dividend up 69% as another Anglo unit reports stellar results

Kumba CEO Mpumi Zikalala. (Photo: Supplied)

Kumba Iron Ore faced logistical challenges last year related to Transnet and the weather, but it still increased production by 9%. Combined with higher prices, this has resulted in a dividend of R103.20 per share — a payout ratio of 100% of headline earnings that are up 69% on last year.

Following on the heels of Amplats’ record earnings, Kumba was the second Anglo American unit this week to unveil stellar results for the 2021 financial year. 

The bottom line is that its cash dividend for the year rose 69% to R103.20 per share, representing a payout ratio of 100% of headline earnings. The total dividend was R43.5-billion, compared with R26-billion last year. 

Coming in the wake of Amplats’ R80-billion dividend payout announced Monday, it is all music to the ears of the companies’ shareholders, the biggest being Anglo American, which will unveil its results on Thursday. 

Kumba produces iron ore in the arid Northern Cape, and China remains its key market, although it is looking to put its eggs in other nests as well. 

“We are increasing the overall grade of our products and broadening our customer base beyond China,” the company’s new CEO Mpumi Zikalala said. 

The company’s profits were lifted by higher prices. The average realised iron ore export price it received rose 42%, a reflection of the economic recovery in China and the world from the 2020 pandemic-triggered meltdown.

Production was up 9% despite logistical challenges related to Transnet’s woes and spells of bad weather. 

Kumba’s earnings boost, as in the case of other mining companies, is also a boost to the Treasury. The nation’s finances would be in far worse shape were it not for the commodities cycle. The company paid R21.1-billion in income tax and royalties, compared with R16.1-billion in 2020. DM/BM

At 6.30pm on Wednesday, 23 February 2022, Business Maverick’s Tim Cohen and Ray Mahlaka, together with the CEO of Pan-African Investment & Research Services Dr Iraj Abedian, will unpack the key points from Finance Minister Enoch Godongwana’s Budget Speech and answer your questions. Register here to join the discussion: https://event.webinarjam.com/register/594/4v443uxym 



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