Kumba Iron Ore: Tougher pricing + FX headwind = earnings under pressure

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Kumba Iron Ore: Tougher pricing + FX headwind = earnings under pressure

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Kumba Iron Ore

Tougher pricing + FX headwind = earnings

under pressure

Reiterate Rating: UNDERPERFORM | PO: 290.00 ZAR | Price: 268.59 ZAR

Earnings impacted by rand, rain and lower FOB price 21 July 2026

Kumba Iron Ore provided a trading statement with an update on H1 EBITDA and Equity

headline EPS guidance. According to the company, production was 3% lower following

heavy rainfall, with sales volumes down 1%. EBITDA was negatively impacted by a

Key Changesstronger rand and lower realised FOB price. EBITDA is now expected to be between

R10,433m-11,194m. Headline earnings per share is expected to be between R12.68 and (ZAR) Previous Current

R13.61. Model update: We update our model for updated guidance to reflect lower 2026E EPS 35.78 30.38

realised prices, higher freight costs and cash costs. PO remains at ZAR290 based on 5x 2026E DPS 24.90 21.20

FY27E EV/EBITDA multiple below the historical average to reflect ongoing operational

challenges. We reiterate our Underperform rating, we are cautious (if not negative) iron Equity Analysts

Jason Fairclough >>

ore. Research Analyst

MLI (UK)

UHDMS tie-in risks and recapitalisation in 2026 +44jason.fairclough@bofa.com20 7995 0225

UHDMS: Tie-in risks well assessed ahead of 2H26. Bringing external experts in to run Reinhardt van der Walt >>

further risk assessments. Peak spend this year on infrastructure outside of plant (power, Research Analyst MLI (UK)

instrumentation, conveyor). Recapitalisation: Mining fleet replacement at 35%. Some

Paul Kirjanovs >>

challenges with getting equipment from suppliers. Aiming to spread out procurement of Research Analyst

vehicles to reduce lumpiness in replacement cycle in future.