Kumba Iron Ore resumes dividend

Kumba Iron Ore reported a 53% jump in mid-year earnings yesterday and announced it would resume dividend payments, sending its shares 12% higher.

Headline earnings rose to R4.6 billion, or R14.42 per share, for the six months to June 30. That was in line with what the company had flagged to the market.

CEO Themba Mkhwanazi said its stronger operational performance and robust net cash position enabled the company to resume an interim cash dividend payment of R15.97 per share.

Kumba said it was resuming dividend payments, which were halted in 2015, as part of a policy to return excess cash to shareholders but would continue to assess the company’s requirements.

“We are still conservative in our approach. We need to review the environment we are operating under,” Mkhwanazi said.

“Future dividends are likely to be tied to commodity prices with Kumba’s positive cash position able to soften price volatility,” said Avior Capital Markets investment analyst Wade Napier. – Reuters