The mining group reported headline earnings per share drop by 29 per cent at 34.32 rand per share.
The mining company’s year ended 31 December 2014 results also reported the group’s operating expenses surging by nine per cent to 28.4 billion rand from 26.1 billion rand.
[DATA KIO:Kumba Iron Ore Limited] also saw its operating profit declining to 19.2 billion rand from 28.4 billion rand in the same comparable period in 2013.
Kumba’s operating profit margin for 2014 decreased to 40 from 52 per cent in 2013.
The fall in iron ore prices and input cost pressures from higher mining volumes impacted profitability.
The group attributed drop in revenue to the significant drop in average realised iron ore prices offset to an extent by the weaker average ZAR/US$ exchange rate as well as four per cent higher total sales volumes of 45.3 Mt.
“The year was characterised by the significant drop in the average export iron ore price, down 28 per cent from 135 US dollars to 97 US dollars per tonne,” said Kumba through a SENS announcement.
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“Attributable and headline earnings for the period were 33.44 rand and 34.32 rand per share respectively compared to 48.09 rand and 48.08 rand respectively in 2013 on which a final cash dividend of 7.73 rand per share has been declared, at a 1.7 times cover.”
The group added that the increase in dividend cover from 1.3 times from the 2014 interim dividend to 1.7 times for the final 2014 dividend recognises the impact of lower iron ore prices on the company’s cash generation amidst the continued uncertain market environment.