HomeBase MetalsExxaro posts 68% earnings increase

Exxaro posts 68% earnings increase

Exxaro’s Grootgeluk
coal mine in Limpopo
Johannesburg, South Africa — MININGREVIEW.COM — 13August 2010 – South African diversified miner Exxaro has posted a 68% rise in first-half headline earnings, boosted by its coal unit, and the company says that it expects a better second half, although there are still risks.

The results statement issued here by the company said Exxaro’s first-half headline earnings per share had risen to 683 cents from 406 cents in the comparable period, also boosted by the inclusion of its Mafube joint venture. Revenue for the six months rose 10% to R7.9 billion.

The company “’ which mines for coal, mineral sands and some base metals “’ said it expected earnings in the second half to rise on the back of current economic recovery, although currency fluctuations were expected to pressure earnings.

“The relative strength of the local and Australian currencies could further impact on the results for the second half of 2010 as well,” it added.

Coal exports are expected to rise in the second half, compared with the first six months of the year, subject to availability of rail capacity, the company pointed out.

South African coal exporters have not been able to ship all their coal destined for exports due to constraints on the rail lines leading to the port, and despite an expansion of the coal export terminal to accommodate exports of up to 91Mtpa.

“International demand for hard coking coal is set to remain strong and should support an increase in semi-soft coking coal prices," the company said.

Exxaro also sees positive momentum for its mineral sands business. “The current shortage of pigment should lead to an increase in prices, while demand for mineral sands products is generally anticipated to improve further," Exxaro said.

Exxaro declared an interim dividend of 200 cents per share.