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Thu, 22 Aug 2019 18:18 - Updated Thu, 22 Aug 2019 18:18

South Africa's Exxaro buoyed by equity investments as core profit falls

JOHANNESBURG - South African miner Exxaro Resources on Thursday reported a 42% rise in half-year headline profit as income from equity investments offset lower core earnings.

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Headline earnings per share (HEPS) rose to 17.30 rand per share in the six months to the end of June, from 12.22 rand per share a year earlier. HEPS is the main profit gauge in South Africa and strips out certain one-off items.

Income from equity investments rose to 2.92 billion rand ($192 million) from 1.05 billion in the prior period, boosted by the company’s 21% stake in Sishen Iron Ore Company, a subsidiary of Kumba Iron Ore Limited.

Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 29% to 2.81 billion rand from 3.95 billion rand in the previous year.

The miner said its EBITDA fell due to factors including lower revenue, inflationary pressure on costs, and higher distribution costs driven by larger export volumes.

Coal production volumes fell 6%, impacted by the divestment of North Block Complex operations at end of October 2018, as well as lower production at its Matla mine, and lower demand from Eskom for the Medupi Power Station affecting production at its Grootegeluk mine.

The firm declared an interim cash dividend of 864 cents per share, up 63% year-on-year, and a special cash dividend of 897 cents from the proceeds of its disposal of a stake in U.S. titanium products company Tronox

($1 = 15.2421 rand)Reuters

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