Exxaro sees 12% increase in revenue, declares dividend

Exxaro, a leading mining company in South Africa, has seen a 12% increase in revenue for the year ended December, despite facing some challenges within the industry. The CEO of Exxaro, Mxolisi Mgojo, highlighted the company's core EBDA numbers, which showed a 25% increase, and core headline earnings, which were up by 26%. Additionally, cash generated by operations increased by 47%, enabling the company to declare a significant dividend at the end of the year. This exceptional performance is particularly noteworthy considering the headwinds against the core price environment compared to other commodities. Mgojo emphasized that it has been a fantastic year for Exxaro, with four years of fatality-free operations and a 58% improvement in the lost time injury frequency rate. The company achieved record exports of 12 million tons and is positioned to increase exports to 15 million tons. However, challenges with rail capacity, particularly from Transport Freight Rail (TFR), have impacted the industry's ability to meet demand. Exxaro is exploring alternative ports and working closely with TFR to find solutions to support the industry. Despite these challenges, Exxaro remains optimistic about the opportunities in the market, especially with improving coal prices and a slow but steady recovery in the domestic market. The company's strategy of returning value to shareholders through dividends and share buybacks reflects its commitment to delivering shareholder returns. The share buyback program, in particular, is aimed at addressing the disconnect between the intrinsic value of the company's coal business and its current share price. Looking ahead, Exxaro remains confident in its long-term contracts with Eskom, the state power utility, which provide a stable foundation for the business. The company does not see any immediate threats to its supply agreements with Eskom, which are critical for ensuring power supply in the country. With Eskom's commitment to reducing load shedding and improving power station availability, Exxaro is optimistic about the future outlook for the industry. As the company navigates industry challenges and focuses on sustainable growth, it remains committed to delivering value to its shareholders and contributing positively to the economy.