South Africa - Pretoria - 07 August 2019 - Growthpoint Properties has completed its R600-million develoment of Exxero's leading edge new head office in Centurion. Picture: Oupa Mokoena/African News Agency (ANA)
JOHANNESBURG - Exxaro Resources yesterday became the latest company to put pressure on the government to take action to spur the economy as it declared a special dividend during the six months to end June.

Chief executive Mxolisi Mgojo said more structural and sustainable reforms were required to inject the confidence required by the economy and create jobs.

“It is now critical that we implore the government for structural reforms. We stand ready to work with the government to restore state-owned enterprises and to get the economy to levels where it can start growing again.

“We have been patient, and we are not seeing action. We are going to put pressure on the government to take action.

“We are going to call on the government to say that we are willing to be part of the solution,” Mgojo said during the company’s interim results presentation at the JSE.

Earlier this month Nedbank group chief executive Mike Brown issued a strong warning, saying the country was fast running out of both time and money, and urgently needed structural reforms to stem economic and fiscal deterioration.

Exxaro, the JSE listed diversified company, reported a strong balance sheet saying it paid R6.32bn in dividends, including a R3.2bn special dividend from the sale of shares in Tronox as the group’s investments boosted results.

It returned an interim dividend of R8.64 a share compared to R5.30 cents a share last year as it passed through handsome gains from investment in the Sishen Iron Ore Mine (Sioc).

In March Exxaro rewarded shareholders with a bumper dividend on higher coal prices and a solid performance from its iron ore investment for the year to end December.

The group declared a R10.85 dividend. The final dividend was R5.55 a share. The company’s 26percent shareholding in Sioc contributed R2.6bn total dividends last year.

Yesterday, Exxaro said proceeds of the New York-listed mineral sands company Tronox disposals saw it declaring a special dividend of R8.97 a share in the half year.

However, Exxaro was hurt by the collapse in export prices. Average export prices fell 32percent to $54 (R823) a ton in the first half of 2019 from $79 a ton in 2018, although it was cushioned somewhat by a weaker average spot exchange rate of R14.19 to the dollar from R12.30 to the dollar in 2018.

The benchmark API4 Richards Bay Coal Terminal export price averaged $74 a ton in the first six months of 2019 compared to $97 a ton in 2018. Eskom took lower than contracted volumes for the Medupi Power Station. However, commercially there was no impact on revenue.

Earnings before interest, tax, depreciation and amortisation, which is a measure of operating performance, took a 29 percent knock to R2.8bn at managed mines, as the significant decline in the benchmark API4 price negatively impacting revenue, as well as cost pressures, which are further explained under financial and operational results.

Headline earnings rose 42percent at R4.342bn from R3.06bn in 2018 or R17.30 a share from R12.22 a share in 2018.

Exxaro shares declined 0.30percent on the JSE yesterday to close at R134.05.