Exxaro earnings plunge due to weakness in commodity prices
by Staff Writer,
2016-03-03 08:49:28.0
EXXARO’s earnings have tumbled more than 60% as a result of the current weakness in commodity prices and the lack of demand for its products.
"Iron ore prices plummeted more than 42% in 2015. The ongoing oversupply in the titanium dioxide market and lacklustre demand continued to depress pigment prices," the company said.
On Thursday, Exxaro reported a 67% decline in headline earnings per share (HEPS) to 457c compared with the year-earlier period. Group revenue increased 12% to R18bn, while it made a net operating profit of R3.3bn compared with a loss of R3.3bn in the previous year.
Exxaro declared a gross final cash dividend of 85c per share.
The company said 2016 would be challenging.
"The key risk to the South African economy for 2016 is the anticipated slowing economic growth and thus weakening fiscal fundamentals which could pave the way for a credit rating downgrade. We expect the (rand) to remain vulnerable in 2016 on account of domestic and global events," Exxaro said.
In the past year, Exxaro’s share price has shed 37% of its value.
Shares closed at R71.17 on the JSE on Wednesday.
COUNTING THE COST: A pile of coal is seen at Exxaro Group’s Inyanda Coal Mine in Witbank. Picture: ROBERT TSHABALALA
EXXARO’s earnings have tumbled more than 60% as a result of the current weakness in commodity prices and the lack of demand for its products.
"Iron ore prices plummeted more than 42% in 2015. The ongoing oversupply in the titanium dioxide market and lacklustre demand continued to depress pigment prices," the company said.
On Thursday, Exxaro reported a 67% decline in headline earnings per share (HEPS) to 457c compared with the year-earlier period. Group revenue increased 12% to R18bn, while it made a net operating profit of R3.3bn compared with a loss of R3.3bn in the previous year.
Exxaro declared a gross final cash dividend of 85c per share.
The company said 2016 would be challenging.
"The key risk to the South African economy for 2016 is the anticipated slowing economic growth and thus weakening fiscal fundamentals which could pave the way for a credit rating downgrade. We expect the (rand) to remain vulnerable in 2016 on account of domestic and global events," Exxaro said.
In the past year, Exxaro’s share price has shed 37% of its value.
Shares closed at R71.17 on the JSE on Wednesday.
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