Exxaro first-half revenue inches up

Exxaro Resources, a diversified resources group, released its interim earnings report which showed a 37% drop in headline earnings due to lower coal and iron ore prices and reduced demand. CNBC Africa's Fifi Peters spoke with Dr. Nombasa Tsengwa, the CEO of Exxaro, to delve deeper into the numbers and discuss the company's performance. Despite Exxaro's stock being down around 3% on the day of the interview, Tsengwa highlighted the positive results the company achieved in the first half of the year. One of the key challenges faced by Exxaro was market volatility, particularly in South Africa where logistical constraints impacted production and pricing. Tsengwa noted that while the first quarter saw low prices, there was some recovery in the second quarter. However, European markets did not return to previous levels, leading Exxaro to focus on alternative markets such as India. The company also had to navigate challenges with domestic power stations which impacted coal demand. Lower pricing and reduced volumes in the first half, along with iron ore price fluctuations, also affected earnings. Despite these challenges, Exxaro remains optimistic for the second half of the year. Tsengwa mentioned that the company successfully tested alternative ports like Maputo and RBCT's Malti-Pepos terminal, allowing for increased coal exports. With bullish expectations for the coming months, Exxaro aims to move 3.3 million tons through exports. Positive market indicators from India and Japan, as well as potential opportunities in European markets, provide optimism for the company's outlook. Tsengwa highlighted the importance of diversifying export routes while maintaining a partnership with Transnet for coal evacuation. On the energy front, Exxaro showcased progress in wind and solar energy projects, emphasizing involvement in the energy transition and grid infrastructure development. Furthermore, the company is exploring partnerships and opportunities in the renewable energy sector. In addressing the government of national unity in South Africa, Tsengwa expressed optimism and encouraged positive sentiments from global markets and investors. The potential for reinvestment and foreign direct investment in the country hinges on factors like financial stability, policy execution, and infrastructure development. Overall, Exxaro's strategic initiatives and adaptability in a challenging market environment position the company for growth and resilience in the future.