Kumba expects earnings to plunge

IOL pic july22 BR Kumba 2971 INDEPENDENT MEDIA Atlas blast drill rigs are seen at Kumba's Sishen mine. File picture: Supplied

Johannesburg - South Africa's Kumba Iron Ore said on Tuesday it expected full-year earnings to plunge as much as 67 percent as it battled to cope with slumping prices the steel-making ingredient, sending its shares lower.

The unit of Anglo American said headline earnings per share (EPS) are expected to fall by between 65 percent and 67 percent to 11.45 rand and 12.05 rand.

Read: Job cuts: Kumba begins consultations

Headline EPS is the main gauge of profit in South Africa and strips out certain one-off items.

Shares fell as much as 8 percent before recouping losses to trade 2.3 percent lower at 35.54 rand by 09h55 GMT.

Iron ore prices fell about 35 percent in 2015 due to a supply glut and growth concerns in top consumer China, forcing Kumba to cut jobs and restructure its main mine, Sishen.

Kumba took a R6 billion ($373.75 million) writedown charge for the reconfiguring of the Sishen mine.

REUTERS

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