JSE:KIO

Stock Analysis Report

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Executive Summary

Kumba Iron Ore Limited, together with its subsidiaries, engages in the exploration, extraction, beneficiation, marketing, sale, and shipping of iron ore primarily in South Africa.


Snowflake Analysis

Outstanding track record with flawless balance sheet.


Similar Companies

Share Price & News

How has Kumba Iron Ore's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KIO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.4%

KIO

0.5%

ZA Metals and Mining

6.1%

ZA Market


1 Year Return

8.1%

KIO

45.9%

ZA Metals and Mining

-20.8%

ZA Market

Return vs Industry: KIO underperformed the ZA Metals and Mining industry which returned 45.9% over the past year.

Return vs Market: KIO exceeded the ZA Market which returned -20.8% over the past year.


Shareholder returns

KIOIndustryMarket
7 Day4.4%0.5%6.1%
30 Day36.8%5.7%6.9%
90 Day70.5%15.1%-3.0%
1 Year23.1%8.1%53.7%45.9%-9.3%-20.8%
3 Year345.4%213.5%193.6%168.9%8.2%-12.5%
5 Year308.8%187.7%205.2%163.7%15.2%-13.9%

Price Volatility Vs. Market

How volatile is Kumba Iron Ore's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kumba Iron Ore undervalued compared to its fair value and its price relative to the market?

9.77x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KIO (ZAR495.3) is trading above our estimate of fair value (ZAR326.52)

Significantly Below Fair Value: KIO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KIO is good value based on its PE Ratio (9.8x) compared to the Metals and Mining industry average (17.4x).

PE vs Market: KIO is poor value based on its PE Ratio (9.8x) compared to the ZA market (8.4x).


Price to Earnings Growth Ratio

PEG Ratio: KIO's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: KIO is overvalued based on its PB Ratio (4.4x) compared to the ZA Metals and Mining industry average (1x).


Next Steps

Future Growth

How is Kumba Iron Ore forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KIO's earnings are forecast to decline over the next 3 years (-15.4% per year).

Earnings vs Market: KIO's earnings are forecast to decline over the next 3 years (-15.4% per year).

High Growth Earnings: KIO's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KIO's revenue is expected to decline over the next 3 years (-4.4% per year).

High Growth Revenue: KIO's revenue is forecast to decline over the next 3 years (-4.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KIO's Return on Equity is forecast to be high in 3 years time (26.6%)


Next Steps

Past Performance

How has Kumba Iron Ore performed over the past 5 years?

25.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KIO has high quality earnings.

Growing Profit Margin: KIO's current net profit margins (25.3%) are higher than last year (21.2%).


Past Earnings Growth Analysis

Earnings Trend: KIO's earnings have grown significantly by 25% per year over the past 5 years.

Accelerating Growth: KIO's earnings growth over the past year (68.1%) exceeds its 5-year average (25% per year).

Earnings vs Industry: KIO earnings growth over the past year (68.1%) exceeded the Metals and Mining industry 6.4%.


Return on Equity

High ROE: KIO's Return on Equity (44.9%) is considered outstanding.


Next Steps

Financial Health

How is Kumba Iron Ore's financial position?


Financial Position Analysis

Short Term Liabilities: KIO's short term assets (ZAR23.0B) exceed its short term liabilities (ZAR7.1B).

Long Term Liabilities: KIO's short term assets (ZAR23.0B) exceed its long term liabilities (ZAR12.3B).


Debt to Equity History and Analysis

Debt Level: KIO is debt free.

Reducing Debt: KIO has no debt compared to 5 years ago when its debt to equity ratio was 35.7%.

Debt Coverage: KIO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: KIO has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Kumba Iron Ore's current dividend yield, its reliability and sustainability?

9.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KIO's dividend (9.44%) is higher than the bottom 25% of dividend payers in the ZA market (4.19%).

High Dividend: KIO's dividend (9.44%) is low compared to the top 25% of dividend payers in the ZA market (11.59%).


Stability and Growth of Payments

Stable Dividend: KIO's dividend payments have been volatile in the past 10 years.

Growing Dividend: KIO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.2%), KIO's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KIO's dividends in 3 years are forecast to be covered by earnings (86.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Themba Mkhwanazi (49yo)

3.75yrs

Tenure

R42,248,000

Compensation

Mr. Themba M. Mkhwanazi serves as Independent Non Executive Director of Aspen Pharmacare Holdings Limited since April 1, 2019. He has been Chief Executive Officer of Coal South Africa at Anglo American Sou ...


CEO Compensation Analysis

Compensation vs Market: Themba's total compensation ($USD2.51M) is about average for companies of similar size in the ZA market ($USD2.23M).

Compensation vs Earnings: Themba's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Themba Mkhwanazi
CEO & Executive Director3.75yrsR42.25mno data
Bothwell Mazarura
CFO & Executive Director2.75yrsR15.21mno data
Glen Mc Gavigan
Executive Head of Technical & Projects3.83yrsR6.50m0.0066% ZAR10.4m
Timo Smit
Executive Head of Marketing & Seaborne Logisticsno dataR28.40mno data
Virginia Tyobeka
Executive Head of Human Resources10.42yrsR6.38m0.014% ZAR21.9m
Sam Martin
Executive Head of Strategy & Business Development and Acting Executive Head of Corporate Affairs1.92yrsR7.13m0.00064% ZAR1.0m
Philip Fourie
Executive Head of Safety3.08yrsR5.77m0.0046% ZAR7.2m
Vijay Kumar
Chief Operating Officer0.17yrno datano data
Penny Himlok
Investor Relations Managerno datano datano data
Fazila Patel
Company Secretary0.42yrno datano data

2.9yrs

Average Tenure

49.5yo

Average Age

Experienced Management: KIO's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Themba Mkhwanazi
CEO & Executive Director3.75yrsR42.25mno data
Bothwell Mazarura
CFO & Executive Director2.75yrsR15.21mno data
Terence Goodlace
Lead Independent Non-Executive Director2.08yrsR1.14mno data
Mandla Sizwe Gantsho
Independent Chairman of the Board2.67yrsR1.48mno data
Seamus French
Non-Executive Director3.25yrsR409.00kno data
Sango Ntsaluba
Independent Non-Executive Director3yrsR890.00k0.00016% ZAR254.1k
Nomalizo Langa-Royds
Independent Non-Executive Director2.5yrsR834.00kno data
Mary Bomela
Independent Non-Executive Director2.5yrsR513.00kno data
Buyelwa Sonjica
Independent Non-Executive Director8yrsR738.00kno data
Nonkululeko Dlamini
Non-Executive Director3.58yrsR490.00kno data

2.9yrs

Average Tenure

57yo

Average Age

Experienced Board: KIO's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: KIO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Kumba Iron Ore Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kumba Iron Ore Limited
  • Ticker: KIO
  • Exchange: JSE
  • Founded: 2006
  • Industry: Steel
  • Sector: Materials
  • Market Cap: R158.830b
  • Shares outstanding: 320.67m
  • Website: https://www.angloamericankumba.com

Number of Employees


Location

  • Kumba Iron Ore Limited
  • Building 2B
  • Centurion Gate
  • Centurion
  • Gauteng
  • 157
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KIOJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARNov 2006
KUMB.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2006
KIRO.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 2006

Biography

Kumba Iron Ore Limited, together with its subsidiaries, engages in the exploration, extraction, beneficiation, marketing, sale, and shipping of iron ore primarily in South Africa. The company produces iron ore at Sishen and Kolomela mines in the Northern Cape Province. It also operates a port in Saldanha Bay. The company supplies its iron ore to the steel industry; and exports to China, rest of Asia, Europe, the Middle East, North Africa, and Americas. The company was founded in 2006 and is based in Centurion, South Africa. Kumba Iron Ore Limited operates as a subsidiary of Anglo South Africa Capital (Proprietary) Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/06 20:22
End of Day Share Price2020/06/05 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.