Johannesburg - South African diversified resources group Exxaro reported a 39-percent drop in first-half headline earnings on Thursday, booking an impairment of R292-million on a coal mine that could cease production.
Exxaro's headline earnings per share came in at 712 cents for the six months to end June compared to 1,162 cents in the same period last year. Headline EPS are the main profit gauge in South Africa and strip out certain one-time items.
The company, a big supplier to power utility Eskom, said total coal production coal production remained stable at 19 million tons.
An interim dividend of 235 cents a share was declared, a 33-percent decline from last year's interim payout.
South Africa's second-largest coal producer, with interests in iron ore and base metals, said its second-half results are expected to be negatively impacted by low coal prices, volatility in the rand-dollar exchange rate and the availability of trains for coal exports.
Exxaro is developing new markets in China, India and Pakistan and said a proposed ban on low-grade imports to China may benefit higher-grade South African coal.
Domestic market demand is expected to be sensitive to international market pricing influences but supply to Eskom from Exxaro remains on schedule at agreed supply levels despite delays in the utility's new power stations. - Reuters