Exxaro’s earnings belie lower coal sales

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Exxaro’s earnings belie lower coal sales

Published Date: 2019-08-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Exxaro’s earnings belie lower coal sales

The coal producer says a bigger contribution from its equity-accounted investments has compensated for weaker coal sales.

Exxaro expects to report a strong rise in first-half earnings as a bigger contribution from its investments made up for lower coal sales.

In a trading statement, the coal and heavy minerals producer said headline earnings per share for the six months to end-June were likely to be 35% to 47% higher, while attributable earnings per share would probably double. It said an increase in earnings from its equity-accounted investments had compensated for a reduction in earnings before interest, tax, depreciation, and amortisation (EBITDA) from coal.

Earnings from the coal business were adversely affected by lower domestic sales and a lower average price per tonne on its exports - although export volumes rose and it benefitted from a favourable rand/dollar exchange rate.

Apart from its managed coal operations, Exxaro has interests in iron ore and zinc mining assets including the Sishen Iron Ore Company, the Black Mountain zinc mine in the Northern Cape and US titanium producer Tronox.

Its results are due for release on August 22. Its shares fell 5.7% to R137.44 yesterday.





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