Exxaro aided by record coal exports

The diversified resources group says while the operating environment remained challenging, its managed operations were resilient.

Exxaro says its operations remained resilient in the first half of its financial year despite the impact of the Covid-19 pandemic. However, the diversified resources group will post a decline in earnings for the period due to the accounting treatment of non-controlling interests held in empowerment vehicle Eyesizwe RF.

In a trading statement, Exxaro said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-June to be 12-28% higher than the R3.19 billion reported last year. While Its operations were declared essential services during the lockdown, it said the environment remained challenging. Higher commercial coal revenue was supported by record coal export volumes, with the weaker rand helping to offset lower dollar prices.

Earnings per share (EPS) for the six months were likely to be 27-43% lower than last year while headline EPS (HEPS) would be down by between 18% and 34%. It attributed this to the accounting of non-controlling interest for the outside shareholders of Eyesizwe RF. Other once-off items impacting earnings included the gain it made in the prior year on the partial disposal of its stake in Tronox Holdings, as well as the accounting treatment of Cennergi after it took full ownership of the renewable energy company last September.

After adjusting for non-core items for both financial years, Exxaro said core HEPS would likely be 1% to 17% higher than the R12.01 reported last year.

It’s results are scheduled for release tomorrow. Its shares closed 0.7% up at R139.72 yesterday.

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