FINANCIAL HIGHLIGHTS:
1. Headline earnings increased by 19% to ZAR 17 billion
2. Revenue increased by 28% to ZAR 45.8 billion driven by 26% higher prices
3. Operating profit of ZAR 32 billion up 27%
4. Cash generated from operations rose by 27% to ZAR 34.3 billion
5. ZAR 8.7 billion paid to South African government
6. Record ZAR 17.9 billion paid in dividends
7. Total cash dividend of ZAR 22.50 per share; final cash dividend of ZAR 44.20 per share
OPERATING HIGHLIGHTS:
1. Exceptional safety performance; zero fatalities
2. Envision returned ZAR 2.7 billion to employee shareholders
3. Kolomela mine production five months ahead of schedule and within budget
4. Production at Sishen mine negatively impacted by abnormal rainfall during H1
5. Record breaking 39.1 million tonne railed on the Sishen-Saldanha line
6. Record export sales volumes of 37.1 million tonne despite production challenges at Sishen mine
Commenting on the results, Mr Chris Griffith CEO of Kumba Iron Ore said that "Driven by export volume growth and a 26% increase in iron export prices, Kumba delivered another set of outstanding financial results for 2011. We have achieved records in safety, exports, earnings and dividends. We are particularly proud of the progress made at Kolomela mine, which delivered on its promises, five months ahead of schedule and within budget. These results, together with the exceptional safety performance demonstrate that our strategy of optimising value from current operations and investing in safe, quality growth projects, is delivering.”
"We are also delighted with Envision, our broad based employee share scheme. Envision sits alongside our broad based empowerment initiatives and sets a benchmark for employee empowerment goals and ideals in our country. Kumba has delivered meaningful broad based value transfer to our employees with a capital distribution of ZAR 2.7 billion, and ZAR 526 million distributed in 2011 to the communities in which operate. This is in addition to our dividend paid to Exxaro of ZAR 3.5 billion."
On the outlook for 2012, Mr Chris Griffith added that "Current volatile market conditions are expected to persist during the first half of the year. Iron ore prices in the second half of 2012 will be largely dependent on the improvement in the overall global economy, and in particular, the monetary policy easing in China."
He said that waste mining at Sishen mine is anticipated to increase again this year, in line with the planned ramp up that commenced in 2009, which will put upward pressure on unit cash costs of production. Annual production volumes from Sishen mine are expected to return to design capacity. Kumba's ability to supply iron ore to the market will be enhanced by the ramping up of Kolomela mine during 2012 to produce between 4 million tonne and 5 million tonne in 2012. Export sales volumes in 2012 are anticipated to grow by some ~3 million tonne from the volumes achieved in 2011 as volumes from Kolomela mine ramp up, offset by the fact that excess finished product stockpiles at Sishen mine have been depleted to normal operating levels. Domestic sales volumes remain dependent on the off-take requirements from ArcelorMittal.
He added that "Our growth target of achieving 70 million tonne by 2019 in South Africa remains intact. Several studies are being conducted in central and west Africa as part of the company's growth strategy to establish a second mining footprint in Africa. Our focus continues to be on safety, production and mining volumes, sales and containing costs. These initiatives will help to lessen the adverse effects of inflationary cost escalations and operational cost pressures."
