Exxaro Resources’ share price dipped 4% to R125 on Friday morning after it warned shareholders that its basic headline earnings per share (HEPS) for 2017 were expected to be about a fiftieth of the prior year’s.
The coal and heavy metals miner said in a trading statement it expected to report on March 8 that basic HEPS for the year to end-December would be between 24c and 29c, a sharp drop from the prior year’s R13.02.
This was partly due to the dilution caused by its replacement black economic empowerment deal after the lock-in period of its previous deal ended and shareholders cashed out.
Exxaro said measured by attributable earnings per share, the decline was a more modest 6%-15%.
The group also cited its post-tax share of Sishen Iron Ore’s reversal of impairment of property, plant and equipment.
On February 13, Exxaro delivered a pleasant surprise to shareholders when it declared a special dividend of R12.55 a share, to be paid on March 5, from the proceeds of the part-sale of its shares in US titanium miner Tronox.
The share price surged R10, or almost 8%, to R148.42 on the day.
Analysts speculated that the special dividend could have been declared sooner than shareholders expected as the group had not fully exited its investment in Tronox.
Proceeds of the disposal would be used to fund operations, repay debt and make distributions to shareholders.
Exxaro acquired its Tronox shares through a deal in 2011 in which Tronox’s Tiwest operations in Western Australia were combined with Exxaro’s 76% stakes in KwaZulu-Natal Sands, near Mtunzini, and Namakwa Sands on the West Coast.