Exxaro’s Inyanda Coal Mine in Witbank. Picture: ROBERT TSHABALALA
Exxaro’s Inyanda Coal Mine in Witbank. Picture: ROBERT TSHABALALA

Exxaro Resources, a large coal miner, has rewarded its shareholders handsomely after a year of record operational and sales performances and an inflow of cash from the sale of an investment.

Exxaro, an empowered mining company, reported a post-tax profit of R7.1bn for the year to end-December 2018, compared with a profit of R6bn the year before.

Revenue increased by 12% to R25.5bn, while operating profit grew to R5.7bn from R5.2bn.

With the declaration of a final dividend of R5.55 per share, Exxaro raised its total returns to shareholders for the year by 55% to R10.85 a share.

Exxaro noted it had record performances in coal production, sales and export volumes of 47.8-million tonnes, 45.2-million tonnes and eight-million tonnes respectively for the year.

Head of finance at Exxaro Riaan Koppeschaar joins Business Day TV to talk about the company’s numbers.

Adding to the group’s cash inflows was a R2.6bn dividend received from its stake in Sishen Iron Ore Company (SIOC), up from R1.4bn a year earlier. SIOC is the operating company controlled by Kumba Iron Ore, which owns the largest iron ore assets in SA.

Exxaro paid out a R4.5bn special dividend in March 2018 to disburse the income it received from the sale of part of its stake in Tronox, a titanium and chemical company that was deemed a noncore part of its portfolio.

Net debt at the end of 2018 stood at R3.9bn, compared to a net cash position of R69m at the end of the previous year.

The increase in revenue came from higher coal prices and increased volumes delivered to Eskom’s new Medupi power station from the Grootegeluk colliery.

Export coal prices averaged $77 a tonne, up from the previous year’s $69.

Exxaro increased capital expenditure on growth projects at its mines in the Waterberg, Limpopo, and in Mpumalanga. It spent R2.9bn during 2018, compared to R601m the year before.

“We are proud to report that we are on track and within budget to deliver value on our coal capital projects, spending more that R20bn over the next five years to increase sales volumes from 45-million tonnes per annum in 2018 to more than 60-million tonnes per annum by 2023,” the company said.