Kumba Iron Ore earnings jump; holds off dividend amid price volatility

Published 2017/02/14, 07:50
Updated 2017/02/14, 08:00
© Reuters.  Kumba Iron Ore earnings jump; holds off dividend amid price volatility
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JOHANNESBURG, Feb 14 (Reuters) - Kumba Iron Ore ltd KIOJ.J , a unit of Anglo American Plc AAL.L , said on Tuesday its 2016 earnings more than doubled, partly on higher prices, but held off on paying a dividend because of a volatile market outlook.

* Headline earnings per share rise 131 percent to 27.30 rand, in line with what the company previously flagged to the market.

* Kumba said higher iron ore prices, as well its own drive to cut costs by reducing the amount of waste mined, contributed to the improvement in earnings.

* Total revenue of 40.8 billion rand, a rise of 13 percent, mainly as a result of the increase in average realised FOB iron ore prices (2016: US$64/tonne; 2015: US$53/tonne)

* No dividend declared. "While the reinstatement of the dividend is a key priority for the group, the board concluded that it would be prudent to remain ungeared over the short to medium term whilst the period of price volatility continues," the company said.

* The company also said it was prudent to maintain balance sheet flexibility as Anglo American has signaled it was reviewing its portfolio with an eye to Kumba's disposal.

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