Diversified miner Exxaro, which supplies coal to Eskom, has opted to pay an interim dividend, saying it fared well amid SA’s lockdown due to record coal exports and a weaker rand.
Exxaro said on Thursday it expected the rand to remain volatile in its second half, though domestic coal prices and demand should be relatively stable as SA’s industrial sector resumes operations.
Pressure on international coal demand is expected to persist well into the first half of 2021, Exxaro said.
The group has declared an interim dividend per share of R6.43 to end-June, a R2.3bn payout. The group had declared a R8.64 dividend in the prior matching period, then equating to R2.17bn.
In its 2019 half-year, the miner also declared a special dividend amounting to R2.25bn, after the sale of its interests in mineral sands company Tronox.
Core earnings before interest, taxation, depreciation and amortisation (ebitda) rose 40% to R3.9bn in the group’s half-year to end-June, when it operated as an essential service. Ebitda is a measure of the underlying operational performance of a company, excluding items such as finance costs.
Core refers to adjusting for assets not seen as essential to a business.
Coal prices were under pressure in dollar terms, though a weaker rand benefited the group. Export sales during the period jumped 39%, the group said, attributing this to more coal being available from some of its mines.
Headline earnings fell 24% to R3.3bn. This was largely due to the effect of Exxaro accounting for the non-controlling interest of its black empowerment scheme from November.
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