Exxaro Resources reports R14.1bn group revenue
JOHANNESBURG - Exxaro Resources, South Africa’s diversified mining company has reported group revenue of R14.1 billion during the six months to June on strong export volumes and the weaker rand.
Exxaro said that group revenue was up 18 percent from R11.9bn a year earlier mainly due to a 15 percent increase in coal revenue and the consolidation of energy revenue relating to Cennergi from April 1.
The higher coal revenue was mainly driven by 3 percent higher local volumes and 39 percent higher export volumes, said the company, adding that this average, together with the weaker exchange rate, more than offset the lower export and local price impact.
The average API4 index price of US$66 per ton was 11 percent lower at US$74 a ton a year earlier which resulted in a slightly lower average price per tonne achieved of US$52 a ton from US$54 a year earlier.
The average spot exchange rate was R16.65 to the US dollar from R14.19 in the first half of 2019, resulting in a 13 percent increase in the average rand export price realised of R862 per ton from R764 a year earlier. Export sales increased by 39 percent as a result of more coal being available from Belfast, Exxaro Coal Central and Grootegeluk mines as well as higher buy-ins. This was partly offset by lower sales by Leeuwpan and Mafube mines.
Chief executive Mxolisi Mgojo said that despite sustained global and domestic economic headwinds, compounded by market challenges and Covid-19, Exxaro maintained a resilient financial and operational performance, continuing our positive trajectory year-on-year.
“The improved revenue was mainly due to higher commercial coal revenue supported by record coal export volumes, albeit at lower US dollar prices but offset by a weaker exchange rate. This result is against a backdrop of severe market disruption, fluid operating conditions and general uncertainty,” said Mgojo.
Financial highlights included the interim dividend of R2.3bn or R6.43 per share, down from R3.09bn or R8.64 per share a year earlier.
Consolidated group core earnings before interest, taxes, depreciation, and amortization (Ebitda) increased by 40 percent, mainly as a result of the higher revenue, which was partly offset by inflationary pressure on costs, additional distribution costs relating to higher export volumes, higher buy-ins and higher costs due to the ramp-up at Belfast.
However, headline earnings were down 24 percent to R3.3bn from R4.34bn mainly due to the accounting of non-controlling interest of R1.22bn. This equated to basic headline earnings per share of R13.21 per share from R17.30 per share a year earlier.