Pretoria, South Africa — MININGREVIEW.COM — 25 July 2008 – South African-based and JSE-listed mining group Exxaro expects its coal business to deliver a substantial improvement in net operating profit for the first half of 2008, compared to the six months ended 30 June 2007.
Releasing its trading statement for the six months ended 30 June 2008, Exxaro pointed out, however, that the group’s net operating profit was expected to be approximately 10% lower than for the corresponding period in 2007, primarily due to a loss in the mineral sands business. It added that mineral sands prices generally had remained depressed, while lower volumes and a persistent strong Australian dollar had negatively affected the Australian operation. Production volumes were also lower at the KZN Sands operation in South Africa, following the previously reported water ingress incident at its Furnace 2 in February 2008. The base metals business was expected to report a lower net operating profit in line with declining zinc prices.
“Attributable earnings and headline earnings for the period – including the group’s 20% shareholding in Sishen Iron Ore Company (Pty) Ltd (SIOC) – are expected to be between R1 150 million and R1 350 million, with attributable (AEPS) and headline (HEPS) earnings per share both being between 330 and 385 cents,” the trading statement revealed. “For the comparable period ended 30 June 2007, the group reported attributable earnings and headline earnings of R839 million and R839 million respectively, with both AEPS and HEPS at 246 cents.”
It added that the Namakwa Sands business and a 26% interest in Black Mountain/Gamsberg – which Exxaro would acquire on conversion and subsequent approval of cession of the respective mining rights – were not included in the results for the six month period ended 30 June 2008.