Exxaro Resources has reported a 13 percent rise in annual earnings as gains from its stake in Sishen Iron Ore offset lower earnings from coal.
Headline earnings per share rose to 3027 cents per share for the year ended December 31, 2019, from 2672c a year ago.
Revenue ticked up 1 percent to R25.7 billion during the period.
Exxaro said yesterday that core equity-accounted income from its stake in Sishen Iron Ore Company had increased to R4.423bn from R2.605bn a year earlier, driven by higher iron-ore prices and a weaker exchange rate.
However, coal production volumes had fallen 3 percent due to the divestment of its North Block Complex operations and lower production at its Grootegeluk operations owing to lower demand from Eskom for the Medupi power station. Exxaro, which supplies coal to cash-strapped Eskom, is exposed to the difficulties at the utility, including delays in the ramp-up of its Medupi power station.
The miner expanded its Grootegeluk coal mine in Limpopo to meet the expected coal demand from the power station. Exxaro said it had decided to relinquish its four prospecting rights grouped into two projects, namely Waterberg North and South, following a strategic review decreasing its total attributable coal resources by 22 percent.
The coal miner said export volumes had risen 14 percent to 9.1 million tons during the financial year from a year ago.
The thermal coal seaborne market had remained in oversupply, while the domestic market had remained stable with demand from Eskom varying due to lower offtake from its Medupi power station offset by additional offtake from Leeuwpan and its Exxaro Coal Central operations.
The miner declared a final dividend of 566c per share compared with 555c per share a year earlier.