Con­sider tak­ing prof­its

Finweek English Edition - - MARKETPLACE - Ed­i­to­rial@fin­week.co.za

Iron ore prices have come off re­cently but they’re still some 10% above the prices from a year ago and al­most 50% above the June 2016 lows. With that in mind, the Kumba up­date showed pro­duc­tion up an­other 17% from the first quar­ter of 2016. How­ever, sales were up only 3% as last year saw the com­pany sell­ing stock­piles. With the rand some 7% stronger over the last year, this means rev­enue is likely to be flat in this first quar­ter, leav­ing any prof­its to come from re­duced costs. While I am still bullish on the share, it may be time to take prof­its.

The Leeuw­fontein pit at Kolomela Iron Ore Mine near Post­mas­burg in the North­ern Cape.

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