Exxaro Resources Profit Jumps 47% on Higher Volumes, Prices
February 23, 2012, 12:52 PM ESTBy Jana Marais
(Updates with coal prices in fourth paragraph.)
Feb. 23 (Bloomberg) -- Exxaro Resources Ltd., the second- largest coal producer in South Africa, said 2011 profit increased 47 percent on higher sales and prices.
Net income advanced to 7.65 billion rand ($990 million), from 5.21 billion rand, the Pretoria-based company said today in a statement. Headline earnings per share, which exclude one-time items, were 20.98 rand, compared with an average estimate of 21.21 rand among 11 analysts Bloomberg surveyed.
Exxaro said profit advanced from rising coal and iron-ore exports and prices. Coal sales to local utility Eskom Holdings SOC Ltd. and ArcelorMittal South Africa Ltd. were lower in the period, it said. While Exxaro doesn’t produce iron ore itself, it benefits from higher prices because of its 20 percent stake in Kumba Iron Ore Ltd.’s Sishen operation.
Prices for coal exported through Richards Bay on South Africa’s east coast averaged $116.46 in 2011, up 27 percent on the prior year, according to IHS McCloskey Group Ltd. data. “International coal prices are expected to decrease in 2012 along with lower coking prices,” the company said.
The stake in Sishen contributed 4.5 billion rand to profit in the year, it said. A final dividend of 5 rand a share was declared, bringing the total payout to 8 rand.
Exxaro’s takeover offer for Perth-based African Iron Ltd., which is developing an iron-ore mine in the Republic of Congo, will close on Feb. 28 and it is targeting production of 10 million metric tons a year by 2016.
The company, which is in the process of combining its mineral-sands business with Oklahoma City-based Tronox Inc., said the unit benefited from an increase in sales prices and the reversal of an 869 million-rand impairment on the carrying value of property, plant and equipment at its KZN Sands operations.
--Editors: Tony Barrett, Ana Monteiro, Vernon Wessels
To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
