Kumba Iron Ore declared a large interim dividend on the back of a new policy governing returns to shareholders, but its underlying profit and sales struggled in the period with logistics, a strong rand and global iron ore prices. Kumba reported a dividend of R14.51 per share for the six months to end-June, including a one-off top-up on top of its new policy of returning between 50% and 75% of headline earnings to investors. Headline earnings for the period were R2.98bn, down from R4.6bn a year earlier. Profit slipped to R3.85bn from R6bn as revenue fell by 9% to R19.5bn. A drop of $2 a tonne in realised iron ore prices and higher freight charges contributed to the lower revenue, as did a stronger rand. Operating costs were 4% higher at R14bn. Despite the market headwinds, combined with difficult logistics, Kumba’s net cash position was R11.7bn, down from R13.5bn. After the interim dividend is paid it will be closer to R5bn. Of overarching concern to the Kumba board is the logistics ...

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