Exxaro incurs losses due to tough operating environment - CNBC Africa

Exxaro incurs losses due to tough operating environment

Earnings

by admin 0

Exxaro deals in coal, titanium dioxide, ferrous and energy markets. PHOTOS: Getty Images

The group, which released results on Thursday, reported that revenue for the six month period ended 30 June 2014 increased 19 per cent to 7.4 million rand from 6.2 million rand in 2013.

Operating expenses however increased to 6.6 million rand for the period from 5.7 million rand in the previous comparative period.

[DATA EXX:Exxaro Resources Limited] is a South Africa-based resources group that deals in coal, titanium dioxide, ferrous and energy markets. Operating profit for the period increased to 792 million rand from 531 million rand.

The group recorded a net operating loss of four million rand for the period under review from a net operating profit of 844 million rand in 2013. Exxaro also incurred a slight loss before tax to 2.6 million rand for the period.

Loss for the period was recorded at 2.4 million rand from a profit for the period of 2.2 million rand. Headline earnings per share however increased 11 per cent to 793 cents from 712 cents in 2013.

(READ MORE: Exxaro reports FY 2013 HEPS increase)

“The group has four reportable operating segments, which are the group’s strategic divisions. The strategic divisions offer different products and services and are managed separately because they require different technology and marketing strategies,” Exxarro said in a statement.

Total revenue for Exxaro’s segments, which include coal, ferrous and Tronox Limited, was recorded at 7.4 million rand for the period.

Coal production for the period was recorded at 18.8 million tonnes, and coal exports were up 43 per cent to 2.7 million tonnes.

The coal business revenue of 7.3 million rand was 19 per cent higher than the previous comparative year in 2013.

FerroAlloys remain the only contributor of revenue to the group’s ferrous business. Revenue increased 29 per cent for this segment to 16 million rand for the period under review compared to the same period in 2013.

This was due to higher demand from Sishen Iron Ore Company Proprietary Limited.

The group’s Mayoko project, which is located in the Democratic Republic of Congo, raised a pre-tax impairment loss of 5.8 million rand due to the group still in the process of concluding the definitive port and rail agreements for the project.

(WATCH VIDEO: Exxaro and Republic of Congo agree on mining convention)

In December 2013, Exxaro sold its 100 per cent shareholding in Exxaro Base Metals to Lebonix Proprietary Limited.

“South Africa’s economic growth outlook remains subject to a number of headwinds – prolonged strikes, electricity supply constraints, low business and consumer confidence and higher consumer debt levels,” said Exxaro.

“The global macro-economic and mineral commodity environment remains challenging. Against this background, Exxaro is optimistic about prospects for the second half of 2014.”

Comments