Kumba Forecasts 29% Profit Drop Amidst Persistent Logistics Issues

Kumba, the iron ore division of Anglo American Plc in South Africa, has projected a 29% decline in half-year profits due to falling iron ore prices and reduced sales volumes. The company cited persistent logistics challenges as a significant factor contributing to the drop.

Headline earnings for the six months ending June 30 are anticipated to range between 6.848 billion and 7.348 billion rand ($378-$405 million), down from 9.643 billion rand a year ago. The average export price per wet metric ton dropped to $97, marking a decrease from $106/wmt the prior year, and sales fell 5% to 18.1 million tons, primarily due to port-related issues.

Production suffered a 2% decline to 18.5 million tons as the state-owned logistics firm, Transnet, faced limited capacity, a locomotive shortage, cable theft, and vandalism. Consequently, Kumba's iron ore stockpile increased to 8.2 million tons from 7.1 million at the end of December 2023, reflecting ongoing logistical difficulties.

(With inputs from agencies.)