Exxaro sees 12% increase in revenue, declares dividend
Exxaro’s headline earnings per share took a 2 per cent dip, for the year ended December, due to once-off costs. Revenue on the other hand jumped 12 per cent, compared to the prior comparable period. The miner declared a final dividend, up R6.77 per share from the previous year; and a special dividend of R5.43 per share. Exxaro CEO, Mxolisi Mgojo joins CNBC Africa for more.
Thu, 18 Mar 2021 16:21:21 GMT
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AI Generated Summary
- Exxaro reports a 12% increase in revenue for the year ended December, with significant growth in core EBDA numbers, core headline earnings, and cash generated by operations.
- Challenges with rail capacity, particularly from Transport Freight Rail (TFR), impact the industry's ability to meet demand, prompting Exxaro to explore alternative ports and work closely with TFR for solutions.
- Exxaro's strategy of returning value to shareholders through dividends and share buybacks reflects its commitment to delivering shareholder returns and addressing the disconnect between intrinsic value and share price.
Exxaro, a leading mining company in South Africa, has seen a 12% increase in revenue for the year ended December, despite facing some challenges within the industry. The CEO of Exxaro, Mxolisi Mgojo, highlighted the company's core EBDA numbers, which showed a 25% increase, and core headline earnings, which were up by 26%. Additionally, cash generated by operations increased by 47%, enabling the company to declare a significant dividend at the end of the year. This exceptional performance is particularly noteworthy considering the headwinds against the core price environment compared to other commodities. Mgojo emphasized that it has been a fantastic year for Exxaro, with four years of fatality-free operations and a 58% improvement in the lost time injury frequency rate. The company achieved record exports of 12 million tons and is positioned to increase exports to 15 million tons. However, challenges with rail capacity, particularly from Transport Freight Rail (TFR), have impacted the industry's ability to meet demand. Exxaro is exploring alternative ports and working closely with TFR to find solutions to support the industry. Despite these challenges, Exxaro remains optimistic about the opportunities in the market, especially with improving coal prices and a slow but steady recovery in the domestic market. The company's strategy of returning value to shareholders through dividends and share buybacks reflects its commitment to delivering shareholder returns. The share buyback program, in particular, is aimed at addressing the disconnect between the intrinsic value of the company's coal business and its current share price. Looking ahead, Exxaro remains confident in its long-term contracts with Eskom, the state power utility, which provide a stable foundation for the business. The company does not see any immediate threats to its supply agreements with Eskom, which are critical for ensuring power supply in the country. With Eskom's commitment to reducing load shedding and improving power station availability, Exxaro is optimistic about the future outlook for the industry. As the company navigates industry challenges and focuses on sustainable growth, it remains committed to delivering value to its shareholders and contributing positively to the economy.