Kumba delivers record first half performance

Kumba Iron Ore, a leading supplier of iron ore globally, has reported a record-breaking performance for the first half of the financial year. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a remarkable 155% jump year-on-year, for the six months ending in June. This outstanding result has largely been attributed to the high material prices and resilient production numbers achieved by Kumba. Themba Mkwanazi, the CEO of Kumba Iron Ore, spoke with CNBC Africa to shed light on the factors behind this exceptional performance. One of the key drivers of Kumba's success has been their robust COVID strategy, which ensured the continuity of operations and the safety of their employees. Mkwanazi emphasized the importance of maintaining operational efficiency and safety amidst the challenges posed by the pandemic. The company's ability to adapt to changes resulting from COVID variants has contributed to their strong operational and financial performance. Kumba's commitment to stakeholders, including shareholders, is evident in their significant contributions to the economy. The company reported giving back 51 billion Rands to stakeholders, which included payments to the fiscus, salaries and wages for employees, procurement from B.E.E. suppliers, and dividends to shareholders and minorities. Looking ahead to the second half of the financial year, Mkwanazi acknowledged potential risks, including disruptions in logistics due to factors like extreme weather and cyber attacks. While Kumba has not been significantly impacted by the recent cyber attack on Transnet, they remain vigilant in addressing disruptions in the ports and railway systems. The company's collaborative efforts with Transnet have facilitated improvements in rail performance, despite weather-related challenges affecting operations. Mkwanazi expressed confidence in Kumba's ability to overcome these obstacles and enhance their recovery plans. A notable shift in export sales was the decrease in China's share from 66% to 55%. Mkwanazi attributed this change to the recovery of other markets outside of China, such as Japan, South Korea, Europe, and the Middle East. These traditional markets have witnessed increased demand for commodities due to vaccinations and economic reopening. While China remains a significant player in the global market, the resurgence of demand from other regions has diversified Kumba's export sales. The company remains optimistic about the future outlook, as global economic recovery and sustained demand for commodities continue to drive their performance.