Kumba Iron Ore , a unit of global miner Anglo-American , reported a 131 percent rise in full-year headline earnings, but said the first half of 2009 would be very challenging for iron ore sales.
Kumba's full-year headline earnings rose to 7.3 billion rand ($733.2 million) from 3.1 billion per share the previous year, with headline earnings per share at 2,302 cents from 1,000 cents.
Revenue was up 86 percent at 21.4 billion rand.
The company said on Monday the results had been buoyed by strong iron prices and the softening of the rand to the U.S. dollar, but were hit by weakening demand on the back of a slowing global economy and a rise in operating costs.
Kumba said it expects to raise production by some 10 percent during 2009, but some minor production cut-backs may be required in the short term to produce higher-quality products.
Kumba will continue to target customers in China in an attempt to redirect any lost contract volumes from Europe and Japan, it said in a statement.
Slumping demand for steel has forced producers across the globe to cut production sharply and delay expansions, leaving the iron ore market with a glut of material and making it almost impossible for miners to achieve a price increase.
More substantial cut-backs in production will depend on the scale of demand cuts from Europe and Japan and the extent to which this can be absorbed by China, it said.
Kumba said it remained confident that the iron ore market fundamentals remain robust in the long term.
It declared a final dividend of 13 rand per share.
Headline EPS is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items.
(Reporting by Agnieszka Flak)
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