Exxaro Resources Ltd. said on Tuesday first-half net income was likely to fall by as much as 34% due to one-off items though it expected higher coal exports and a favourable exchange rate to boost core earnings.
Exxaro said headline earnings per share, the main profit measure for companies in South Africa, for the six months ended June, would be between 11.42 rand($0.65)to 14.20 rand per share, or 18% to 34% lower. This is compared with 17.30 rand a year earlier.
HEPS were partly hurt by the accounting of a non-controlling interest for outside shareholders of Eyesizwe RF Proprietary, which is a special purpose private company that holds a 30% shareholding in Exxaro. It did not elaborate. It added that the results for the first-half and in the prior-year period were also influenced by various other once-off items.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to increase by 12% to 28%, cheering investors who pushed up its shares rose more than 2%.
“Our own managed operations were resilient, resulting in higher commercial coal revenue supported by record coal export volumes, albeit at lower U.S. dollar prices, but benefiting from a weaker exchange rate during the period,” the company said in a statement.
The coal miner was deemed an essential service during South Africa’s lockdown, which lasted from late March to the end of May.
Exxaro is expected to release its interim results on Aug. 13.