EXXARO Resources said headline share earnings for the 12 months ended December would fall by between 16% and 30% owing to lower realised export coal sales.
The company said in November in a pre-financial year close statement that total production for 2023 was expected to remain flat at 43.1 million tons (Mt) and total sales would be 3% higher at 41.4Mt.
Coal prices more than halved year-on-year to average of $122 per ton last year compared to a coal export price index average of $271/t in 2022. But Exxaro is also likely to report freight logistics problems related to Transnet. The state-owned ports and rail company reported a little under 50Mt in total deliveries from South Africa’s coal mines to Richards Bay Coal Terminal – well down on previous averages.
Exxaro’s disappointing realised export sales were offset by a weaker rand/dollar exchange rate and higher prices in the domestic market, the company said.
Exxaro also said it expected a higher contribution from its energy business due to improved wind conditions compared to 2022, as well as higher income from our equity-accounted investment in Sishen Iron Ore Company (SIOC). Exxaro has a 21% stake in SIOC which is controlled by Anglo American’s Kumba Iron Ore.
Commenting on its outlook in November, Exxaro said first quarter coal prices were expected to improve owing to winter restocking as well as increased economic growth in China and India.
Net cash as of end-October was R13.5bn. Exxaro has said it would retain net cash of between R12bn to R15bn ahead of acquisitions in battery minerals with copper especially targeted.
