Record volumes and weak rand support Exxaro

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Record volumes and weak rand support Exxaro

Published Date: 2020-08-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Record volumes and weak rand support Exxaro

The resources group has reported a strong increase in first-half earnings as a softer currency helped offset lower thermal coal prices.

Exxaro Resources has reported a strong increase in first-half earnings despite the additional impact of Covid-19 on an already challenging environment due to global trade tensions, the weak local economy and a decline in thermal coal prices. It credits a 15% increase in coal revenue for its performance as sales to Eskom increased and it achieved record coal export volumes.

The diversified resources group, which has also added renewable energy to the mix following its acquisition of Cennergi, also benefitted from rand weakness over the six months to end-June, helping to offset the decline in the dollar price for thermal coal.

Revenue rose 18% to R14.1 billion and core earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 40% to R3.93 billion. Cash flow generated by its operations improved by 47% to R4.73 billion. Headline earnings per share came in 11% higher at R13.39 and it's declared an interim cash dividend of R6.43 per share.

Exxaro said the outlook remained challenging for the second half of the year, with the re-starting of the global economy expected to bring muted economic growth recovery. It said it continued to "adapt and manage" through the disruption caused by Covid-19.

Its shares closed 2.7% lower at R136.15 yesterday.





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