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Exx - Exxaro Resources Limited - Audited Group Financial Results And Physical

Release Date: 25/02/2010 07:05:36      Code(s): EXX
EXX - Exxaro Resources Limited - Audited group financial results and physical   
information for the 12-month period ended 31 December 2009                      
Exxaro Resources Limited                                                        
(Incorporated in the Republic of South Africa)                                  
Registration number: 2000/011076/06                                             
JSE share code: EXX                                                             
ISIN code: ZAE000084992                                                         
ADR code: EXXAY                                                                 
("the company" or "the group")                                                  
Audited group financial results and physical information for the 12-month       
period ended 31 December 2009                                                   
OVERVIEW                                                                        
* Revenue increased 8% to R15 billion                                           
* Net operating profit adversely impacted by R1 435 million impairment at KZN   
Sands                                                                           
*Currency strength impacted negatively on earnings                              
*Headline earnings 31% lower at 729 cents per share                             
* Final dividend of 100 cents per share; total dividend of 200 cents per        
share                                                                           
* Targeted savings realised through optimisation initiatives and prioritising   
capital expenditure                                                             
CONDENSED GROUP INCOME STATEMENT                                                
Year ended 31 December                                2009       2008           
Audited    Audited          
                                                    Rm         Rm               
Revenue                                               15 009     13 843         
Operating expenses                                    (14 705)   (11 376)       
Net operating profit                                  304        2 467          
Net financing cost (note 4)                           (415)      (241)          
Share of income from investments and                  1 900      1 665          
equity-accounted investments                                                    
Profit before tax (note 2)                            1 789      3 891          
Income tax expense                                    (766)      (510)          
Profit for the year                                   1 023      3 381          
Profit attributable to:                                                         
Owners of the parent                                  1 023      3 405          
Non-controlling interests                                        (24)           
Profit for the year                                   1 023       3 381         
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME                               
Year ended 31 December                                2009       2008           
                                                    Audited    Audited          
                                                    Rm         Rm               
Profit for the year                                   1 023      3 381          

Other comprehensive income:                                                     
Exchange differences on translating foreign            (35)      193            
operations                                                                      
Cash flow hedges                                       (474)     520            
Share of comprehensive income of associates           8          187            
Share-based payment movements                         118        92             
Income tax relating to components of other            142        (115)          
comprehensive income                                                            
Net (loss)/gain recognised in other comprehensive      (241)     877            
income                                                                          
Total comprehensive income for the year               782        4 258          
Total comprehensive income attributable to:                                     
Owners of the parent                                  919        4 117          
Non-controlling interests                             (137)      141            
Total comprehensive income for the year               782        4 258          
Ordinary shares (million)                                                       
- in issue                                            357        355            
- weighted average number of shares                   345        343            
- diluted weighted average number of shares           358        361            
Attributable earnings per share (cents)                                         
- basic                                               297        993            
- diluted                                             286        943            
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION                                 
At 31 December                                         2009       2008          
                                                    Audited    Audited          
                                                    Rm         Rm               
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment                          11 869     11 309        
Biological assets                                      41         34            
Intangible assets                                      87         79            
Investments in unlisted associates and                 1 966      1 849         
joint ventures (note 6)                                                         
Deferred tax                                           629        1 083         
Other financial assets (note 6)                        1 217      1 577         
15 809     15 931         
Current assets                                                                  
Inventories                                            3 133      2 481         
Trade and other receivables                            3 121      2 924         
Current tax receivable                                 57         2             
Cash and cash equivalents                              1 023      1 769         
                                                      7 334      7 176          
Non-current assets classified as held for              86         78            
sale                                                                            
Total assets                                           23 229     23 185        
EQUITY AND LIABILITIES                                                          
Capital and reserves                                                            
Equity attributable to owners of the parent            12 908     12 996        
Non-controlling interests                              1          128           
Total equity                                           12 909     13 124        
Non-current liabilities                                                         
Interest-bearing borrowings                            4 347      3 650         
Non-current provisions                                 1 853      1 746         
Financial liabilities                                  75         31            
Deferred tax                                           995        1 257         
7 270      6 684          
Current liabilities                                                             
Trade and other payables                               2 510      2 366         
Interest-bearing borrowings                            407        500           
Current tax payable                                    57         440           
Current provisions                                     27         21            
                                                      3 001      3 327          
Non-current liabilities classified as held             49         50            
for sale                                                                        
Total equity and liabilities                           23 229     23 185        
Net debt (note 9)                                      3 731      2 381         
Net asset value per share (cents)                      3 616      3 697         
Capital expenditure                                                             
- incurred                                             1 982      1 617         
- contracted                                           3 550      889           
- authorised but not contracted                        1 420      2 711         
Capital expenditure contracted relating to             18         70            
captive mines, Tshikondeni, Arnot and                                           
Matla, which will be financed by                                                
ArcelorMittal SA Limited and Eskom                                              
respectively                                                                    
Contingent liabilities (note 10)                       717        587           
Contingent assets (note 11)                            158        192           
Operating lease commitments                            92         77            
Operating sublease rentals receivable                  4                        
CONDENSED GROUP STATEMENT OF CASH FLOWS                                         
Year ended 31 December                                2009       2008           
                                                    Audited    Audited          
Rm         Rm               
Cash retained from operations                         2 117      3 574          
- net financing costs                                 (381)      (193)          
- tax paid                                            (892)      (487)          
- dividends paid (note 7)                             (1 050)    (984)          
Cash used in investing activities                                               
- capital expenditure                                 (1 982)    (1 617)        
- proceeds from disposal of property, plant and       11         29             
equipment                                                                       
- dividends from investments and equity accounted     1 754      1 044          
investments                                                                     
- increase in investments                             (8)        (179)          
- increase in joint venture (note 8)                  (1 082)                   
- associate acquired                                             (221)          
- acquisition of subsidiaries and other business                 (2 757)        
operations                                                                      
- other                                               (107)      (55)           
Net cash outflow                                      (1 620)    (1 846)        
Net cash flows from financing activities                                        
- shares issued                                       43         31             
- increase in non-controlling interests` loans        10                        
- net borrowings raised                               821        2 734          
Net (decrease)/increase in cash and cash equivalents  (746)      919            
Cash and cash equivalents at beginning of year        1 769      850            
Cash and cash equivalents end of year                 1 023      1 769          
Calculation of movement in net debt:                                            
Net cash outflow                                      (1 620)    (1 846)        
- shares issued                                       43         31             
- loans from non-controlling interests                10         1              
- non-cash flow movements in net debt applicable to   340        (352)          
currency translation differences of transactions                                
denominated in foreign currency                                                 
- non-cash flow movements in net debt applicable to   (123)      282            
currency translation differences of net debt items of                           
foreign entities                                                                
- hedging of share-based payment exposure                        (14)           
Increase in net debt                                  (1 350)    (1 898)        
RECONCILIATION OF HEADLINE EARNINGS                                             
for year ended 31 December 2009      Gross     Tax      Non-       Net          
                                   Rm        Rm       controll-  Rm             
ing                         
                                                    interest                    
                                                    Rm                          
Profit for the year attributable to                                1 023        
owners of the parent                                                            
Adjusted for:                                                                   
- IAS 16 - Impairment of Property,   1 435                         1 435        
plant and equipment                                                             
- IAS 16 - Gains or losses on        88        (24)     (2)        62           
disposal of property, plant and                                                 
equipment                                                                       
- IAS 28 - Share of associates` IAS  (8)       2                   (6)          
16 - Gains or losses on disposal of                                             
property, plant and equipment                                                   
Headline earnings                    1 515     (22)     (2)        2 514        
For the year ended 31 December 2008                                             
Profit for the year attributable to                                3 405        
equity owners of the parent                                                     
Adjusted for:                                                                   
- IAS 16 - Impairment of Property,   21                            21           
plant and equipment                                                             
- IAS 16 - Gains or losses on        66        (20)                46           
disposal of property, plant and                                                 
equipment                                                                       
- IAS 16 - Reversal of impairment of (1)                           (1)          
property, plant and equipment                                                   
- IAS 27 - Gains on disposal of      (7)                           (7)          
subsidiary                                                                      
- IAS 28 - Share of associates` IAS  2         (1)                 1            
16 - Gains or losses on disposal of                                             
property, plant and equipment                                                   
- IAS 28 - Share of associates` IAS  4                             4            
39 - Recycling of remeasurements                                                
from equity to the income statement,                                            
including a hedge of net investment                                             
in a foreign entity but excluding                                               
cash flow hedges                                                                
- IAS 28 - Share of associates` IAS  161                           161          
16 - Impairment of property, plant                                              
and equipment                                                                   
Headline earnings                    246       (21)                3 630        
                                                                                
Year ended 31 December                         2009                2008         
                                            Audited            Audited          
Rm                 Rm               
Headline earnings per share (cents)                                             
- basic                                        729                 1 058        
- diluted                                      702                 1 006        
GROUP STATEMENT OF CHANGES IN EQUITY                                            
                                            Other components of equity          
                          Share    Share    Foreign    Financial   Equity-      
                         capital  premium  currency   instruments settled       
Rm       Rm       trans-     revaluation Rm            
                                         lation     Rm                          
                                         Rm                                     
Balance at 1 January 2008   4       2 063    527        7           968         
Total comprehensive income                   437        138         113         
Issue of share capital              31                                          
Non-controlling interests                                                       
additional contributions                                                        
Liquidation dividend from                                                       
subsidiary                                                                      
Net profit on dilution of                                                       
interest in a subsidiary                                                        
Dividends paid                                                                  
Balance at 31 December      4        2 094    964       145         1 081       
2008                                                                            
Total comprehensive income                   (162)      (142)       160         
Issue of share capital (1)          43                                          
Non-controlling interests                                                       
additional contributions                                                        
Dividends paid (2)                                                              
Balance at 31 December     4        2 137    802        3           1 241       
2009                                                                            
Dividend paid per share    375                                                  
(cents) in respect of the                                                       
2008 financial year                                                             
Dividend paid per share    100                                                  
(cents) in respect of the                                                       
2009 interim period                                                             
Final dividend declared    100                                                  
per share (cents) in                                                            
respect of 2009 financial                                                       
year                                                                            
1 Issued to the Kumba Resources Management Share Trust due to options           
exercised.                                                                      
2 The STC on these dividends will amount to Rnil million after taking           
into account STC credits.                                                       
GROUP STATEMENT OF CHANGES IN EQUITY                                            
                           Retained    Attributable  Non-         Total         
                          income      to owners     controlling  equity         
                          Rm          of the        interests    Rm             
parent        Rm                           
                                     Rm                                         
Balance at 1 January 2008   6 235       9 804         19           9 823        
Total comprehensive income  3 429       4 117         141          4 258        
Issue of share capital                  31                         31           
Non-controlling interests                             2            2            
additional contributions                                                        
Liquidation dividend from   1           1                          1            
subsidiary                                                                      
Net profit on dilution of                             (7)          (7)          
interest in a subsidiary                                                        
Dividends paid              (957)       (957)         (27)         (984)        
Balance at 31 December 2008 8 708       12 996        128          13 124       
Total comprehensive income  1 063       919           (137)        782          
Issue of share capital1                 43                         43           
Non-controlling interests                             10           10           
additional contributions                                                        
Dividends paid (2)          (1 050)     (1 050)                    (1 050)      
Balance at 31 December 2009 8 721       12 908        1            12 909       
Dividend paid per share     375                                                 
(cents) in respect of the                                                       
2008 financial year                                                             
Dividend paid per share     100                                                 
(cents) in respect of the                                                       
2009 interim period                                                             
Final dividend declared per 100                                                 
share (cents) in respect of                                                     
2009 financial year                                                             
1 Issued to the Kumba Resources Management Share Trust due to options           
exercised.                                                                      
2 The STC on these dividends will amount to Rnil million after taking           
into account STC credits.                                                       
NOTES TO THE GROUP FINANCIAL STATEMENT                                          
1.  Basis of preparation                                                        
   The format of the condensed report has been revised to bring it in           
  line with the amendments to International Accounting Standard (IAS)           
34, Interim Financial Reporting. IAS 34 has been amended following            
  the revision of IAS 1 Presentation of Financial Statements and IFRS           
  8 Operating Segments. These amendments were early adopted in 2008.            
  This condensed report complies with International Accounting                  
Standard 34, Interim Financial Reporting, and schedule 4 Part iv of           
  the South African Companies Act. The financial statements from which          
  these group financial results have been derived are prepared on the           
  historical basis excluding financial instruments and biological               
assets, which are fair valued, and conform to International                   
  Financial Reporting Standards. The accounting policies adopted are            
  consistent with those applied in the annual financial statements for          
  the year ended 31 December 2008.                                              
During 2009 the following accounting pronoucements became effective:          
  Amended IFRS 2 Share-based Payments, Revised IAS 23 Borrowing Costs,          
  IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the             
  Constructions of Real Estate, IFRIC 16 Hedges of Net Investments in           
a Foreign Operation, Improvements to Financial Reporting Standards            
  2008 (amendments to various standards) and Circular 3/2009 Headline           
  Earnings. These pronouncements had no material impact on the                  
  accounting of transactions or the disclosure thereof.                         
Year ended 31 December                               2009       2008         
                                                    Audited    Audited          
                                                    Rm         Rm               
2.  Profit before tax is arrived at after                                       
Depreciation and amortisation of                      (1 136)    (898)       
  intangible assets                                                             
   Financing costs                                       (560)      (394)       
   Interest received                                     145        153         
Net realised foreign currency exchange               (576)      476          
  (losses)/gains                                                                
   Net unrealised foreign currency exchange             (45)       39           
  (losses)/gains                                                                
Derivative instruments held for trading              379        (69)         
  gains/(losses)                                                                
   Fair value adjustments on financial                   26         (26)        
  instruments                                                                   
Impairment charges and reversals (note 3)             (1 435)    (20)        
   Net profit on disposal of investments                            7           
   Net deficit on disposal of property, plant           (88)       (66)         
  and equipment                                                                 
3.  Impairment charges and reversals                                            
   Impairment of property, plant and                     (1 435)    (21)        
  equipment                                                                     
   Reversal of impairment of investments                           1            
Total impairments and reversals before and           (1 435)    (20)         
  after tax                                                                     
4.  Net financing cost                                                          
   Interest expense and loan costs                      460        283          
Finance leases                                       66         63           
   Interest income                                      (145)      (153)        
   Net interest expense                                 381        193          
   Interest adjustment on non-current                   34         48           
provisions                                                                    
   Net financing cost as per income statement           415        241          
5.  Tax rate reconciliation                              %          %           
   Tax as a percentage of profit before tax             42,8       13,1         
Tax effect of                                                                
   - assessed losses not provided for                    (1,5)      (0,3)       
   - capital (losses)/profits                            (1,3)      0,2         
   - disallowable expenditure                            (1,3)     (0,7)        
- reclassification of previously                                1,1          
  disallowable expenditure                                                      
   - exempt income                                       2,2        1,0         
   - special tax allowances                              2,1                    
- share of associates` and joint ventures`            29,6       11,9        
   - tax rate differences                                0,5        0,4         
   - Secondary Tax on Companies (STC)                               (0,1)       
   - withholding tax                                                (0,4)       
- Controlled Foreign Company profits (CFC)            (0,8)      (0,1)       
   - foreign exchange differences                                   (0,1)       
   - prior year adjustment                               1,7        1,7         
   - rate change on deferred tax balance                           0,3          
- derecognition of deferred tax asset                 (46,0)                 
                                                                                
                                                         28,0       28,0        
                                                                                
At 31 December                                       2009       2008         
                                                     Audited    Audited         
                                                    Rm         Rm               
6.  Investments                                                                 
Unlisted investments in associates                                           
   - directors` valuation                               14 165      13 162      
   Unlisted investments included in other                                       
  financial assets                                                              
- directors` valuation                              408        387          
   Year ended 31 December                                                       
7.  Dividends paid                                                              
   Cash dividends                                       1 050      957          
Cash dividends paid to minorities                               27           
   Total dividends paid                                 1 050      984          
8.  Increase in joint venture                                                   
   During July 2009, the group invested R1 082                                  
million in Mafube Coal Mining (Pty) Limited, its                              
  joint venture with Anglo South Africa Capital                                 
  (Pty) Limited, which is included in the coal                                  
  segment results.                                                              
The increase consist of the following:                                       
   Property, plant and equipment                         1 156                  
   Non-current financial assets                          3                      
   Inventories                                           36                     
Trade and other receivables                           49                     
   Deferred tax                                          (26)                   
   Provisions                                            (30)                   
   Trade and other payables                              (106)                  
1 082                   
9.  Net debt                                                                    
   Net debt is calculated as being interest-bearing borrowings less             
  cash and cash equivalents.                                                    
10. Contingent liabilities                                                      
   Includes guarantees in the normal course of business from which it           
  is anticipated that no material liabilities will arise. This                  
  includes guarantees to banks and other institutions. The increase in          
2008 and 2009 is mainly attributable to guarantees to the Department          
  of Minerals and Energy in respect of environmental liabilities on             
  immediate closure of mining operations.                                       
                                                                                
11. Contingent assets                                                           
   An outstanding insurance claim of R99 million for the Furnace 2              
  incident at Exxaro TSA Sands (Pty) Limited for which it is probable           
  that settlement will be received in the first half of 2010.                   
A surrender fee of R59 million in exchange for the exclusive right           
  to prospect, explore, investigate and mine for coal within a                  
  designated area in Central Queensland and Moranbah, Australia,                
  conditional on the grant of a mining lease.                                   
12. Related-party transactions                                                  
   During the period the company and its subsidiaries, in the ordinary          
  course of business, entered into various sale and purchase                    
  transactions with associates and joint ventures.                              
These transactions were subject to terms that are no less favourable         
  than those arranged with third parties.                                       
13. Post-balance sheet event                                                    
   The directors are not aware of any matter or circumstance arising            
after the balance sheet date up to the date of this report, not               
  otherwise dealt with in this report.                                          
14. JSE Limited Listings Requirements                                           
   The announcement has been prepared in accordance with the Listings           
Requirements of the JSE Limited.                                              
15. Corporate governance                                                        
   The Group complies in all material respects with the Code of                 
  Corporate Practice and Conduct published in the King III Report on            
Corporate Governance.                                                         
16. Audit opinion                                                               
   The auditors, Deloitte & Touche, have issued their opinion on the            
  group`s financial statements for the year ended 31 December 2009.             
The audit was conducted in accordance with International Standards            
  on Auditing. They have issued an unmodified audit opinion. A copy of          
  their audit report is available for inspection at the company`s               
  registered office. These summarised financial results have been               
derived from the group financial statements and are consistent in             
  all material respects, with the group annual financial statements.            
REPORTED ACTUAL SEGMENT RESULTS                                                 
12 months ended 31 December                          2009         2008          
Audited     Audited          
                                                   Rm          Rm               
REVENUE                                                                         
Coal                                                 9 731       9 040          
Tied operations                                      2 681       2 492          
Commercial operations                                7 050       6 548          
Mineral Sands                                        3 508       2 776          
KZN Sands                                            705         974            
Australia Sands                                      1 469       1 311          
Namakwa Sands1                                       1 334       491            
Base Metals                                          1 582       1 829          
Rosh Pinah                                           566         436            
Zincor                                               1 413       1 733          
Inter-segmental                                      (397)       (340)          
Other                                                188         198            
Total external revenue                               15 009      13 843         
NET OPERATING PROFIT                                                            
Coal                                                 1 905       2 654          
Tied operations                                      75          83             
Commercial operations                                1 830       2 571          
Mineral Sands                                        (1 559)     104            
KZN Sands                                            (1 447)     31             
Australia Sands                                      (2)         (82)           
Namakwa Sands1                                       (110)       155            
Base Metals                                          (8)         (172)          
Rosh Pinah                                           105         (14)           
Zincor                                               (47)        (95)           
Other                                                (66)        (63)           
Other                                                (34)        (119)          
Total                                                304         2 467          
1 Revenue and net operating profit included from                                
effective date of acquisition of 1 October 2008.                                
UNAUDITED PHYSICAL INFORMATION (`000 TONNES)                                    
                               12 months ended       6 months ended             
                              31 December           30 June                     
                               2009       2008        2009        2008          
Coal                                                                            
Production                                                                      
- Power station coal            36 562     36 700      18 583      18 118       
* Tied operations1              16 486     18 095      8 704       8 962        
* Commercial operations         20 076     18 605      9 879       9 156        
- Coking coal                   2 020      2 560       922         1 370        
* Tied operations1              268        327         129         171          
* Commercial operations         1 752      2 233       793         1 199        
- Other coal                    6 638      5 574       3 061       2 427        
- Char                          38                                              
Coal buy-ins                    759        733         430         131          
Total                           46 017     45 567      22 996      22 046       
Sales                                                                           
- Eskom coal                    36 299     36 255      18 494      17 880       
* Tied operations1              16 473     18 054      8 700       8 942        
* Commercial operations         19 826     18 201      9 794       8 938        
- Other domestic coal           4 587      5 481       1 920       2 607        
* Tied operations1              259        352         130         200          
* Commercial operations         4 328      5 129       1 790       2 407        
- Coal export2                  4 715      3 276       2 389       1 284        
- Char                          31                                              
Total                           45 632     45 012      22 803      21 771       
KZN Sands                                                                       
Production                                                                      
- Ilmenite                      368        229         185         133          
- Zircon                        36         34          18          16           
- Rutile                        20         19          10          7            
- Pig iron                      108        50          54          29           
- Scrap pig iron                15         16          7           8            
- Slag tapped                   205        112         100         63           
- Chloride slag                 104        95          51          56           
- Sulphate slag                 24         18          9           10           
Sales                                                                           
- Ilmenite                                 40                      20           
- Zircon                        21         36          4           22           
- Rutile                        14         14          3           7            
- Pig iron                      52         64          17          39           
- Scrap pig iron                6          7           4           6            
- Chloride slag                 68         101         30          49           
- Sulphate slag                 25         17          13          6            
Namakwa Sands3                                                                  
Production                                                                      
- Ilmenite                      244        315         141         159          
- Zircon                        116        130         64          65           
- Rutile                        26         27          15          13           
- Pig iron                      73         103         41          52           
- Scrap pig iron                           6                       2            
- Slag tapped                   126        166         71          86           
- Chloride slag                 97         135         53          64           
- Sulphide slag                 20         24          10          14           
Sales                                                                           
- Zircon                        95         135         37          64           
- Rutile                        23         27          11          14           
- Pig iron                      86         82          47          58           
- Scrap pig iron                           1                                    
- Chloride slag                 76         145         37          77           
- Sulphate slag                 19         26          1           5            
Australia Sands4                                                                
Production                                                                      
- Ilmenite                      207        174         98          85           
- Zircon                        33         29          15          13           
- Rutile                        16         13          8           6            
- Synthetic rutile              109        113         54          56           
- Leucoxene                     14         16          7           6            
- Pigment                       53         43          25          22           
Sales                                                                           
- Zircon                        30         35          6           14           
- Rutile                        14         14          5           5            
- Synthetic rutile              50         62          24          27           
- Leucoxene                     15         17          1           8            
- Pigment                       54         44          23          24           
Base Metals                                                                     
Production                                                                      
- Zinc concentrate              108        109         53          51           
* Rosh Pinah                    94         94          47          47           
* Black Mountain5               14         15          6           4            
- Zinc metal                    116        110         54          60           
* Zincor                        87         87          4           47           
* Chifeng6                      29         23          10          13           
- Lead concentrate              38         37          20          18           
* Rosh Pinah                    20         20          12          12           
* Black Mountain5               18         17          8           6            
                                                                                
- Zinc metal sales              122        126         58          66           
* Domestic                      93         93          44          51           
* Export                        29         33          14          15           
Lead concentrate sales                                                          
- Export                        19         22          6           7            
1 Tied operations refer to mines that supply their entire production to         
either Eskom or ArcelorMittal SA Limited in terms of contractual                
agreements.                                                                     
2 Includes steam coal exports from Exxaro`s 50% share of the Mafube             
joint venture.                                                                  
3 Namakwa Sands is included from 1 January 2008, for comparable                 
purposes.                                                                       
4 Exxaro Sands Australia`s 50% interest in its Tiwest joint venture is          
disclosed.                                                                      
5 Exxaro`s 26% interest in Black Mountain has been disclosed from               
1 January 2008, for comparable purposes.                                        
6 Exxaro`s effective interest in the Chifeng refinery is disclosed.             
COMMENTS                                                                        
Reported results not comparable                                                 
The group`s audited financial results and actual physical information for the   
12-month period ended 31 December 2009 includes a proportionally consolidated   
50% interest in the Mafube Coal Mining (Pty) Limited (Mafube) from 1 June       
2009. The results are not comparable with the corresponding 12-month period     
in 2008 which only includes the acquisition of Namakwa Sands and a 26%          
interest in Black Mountain Mining (Pty) Limited (Black Mountain) with effect    
from 1 October and 1 November 2008 respectively.                                
Comparable supplementary financial results have not been disclosed therefore    
comments are based on an analysis of the financial results and physical         
information compiled for the 12-month periods to 31 December 2009 and 2008      
respectively.                                                                   
Operating results                                                               
Group consolidated revenue increased by 8% to R15 billion with net operating    
profit reducing by R728 million to R1 739 million before the impairment of      
the carrying value of assets at KZN Sands is taken into account.                
Export sales were recorded at weaker average exchange rate levels than in       
2008. However, realised currency losses were incurred as foreign currency       
proceeds on export sales were repatriated at stronger exchange rate levels.     
Unrealised foreign currency losses were also incurred on the revaluation of     
monetary items in foreign currency at 31 December 2009.                         
The coal business reported lower net operating profit as an increase in         
revenue mainly due to higher export and local power station sales volumes was   
more than offset by lower international coal prices and above inflationary      
increases in the cost of electricity, rail tariffs and labour costs as well     
as and realised as well as unrealised foreign currency losses.                  
All three units within the mineral sands business reported operating losses     
on the back of lower demand for their products at softer prices. The two        
local operations, KZN Sands and Namakwa Sands, were adversely impacted by       
realised and unrealised foreign currency losses while the Australia Sands       
operation was affected by the Australian dollar (AUD) persisting at strong      
levels against the US dollar (USD). The operating results of KZN Sands were     
also severely impacted by a R1 435 million impairment to the carrying value     
of the assets following the decision to not proceed with the development of     
the Fairbreeze mine.                                                            
Lower realised zinc prices as well as a lower demand for products resulted in   
the base metals business recording a small net operating loss.                  
Earnings                                                                        
Attributable earnings for the period were R1 023 million (297 cents per         
share). This is significantly lower than the comparable 2008 attributable       
earnings of R3 405 million (993 cents per share) primarily due to the lower     
operating results and the impairment of the carrying value of the assets of     
KZN Sands. Attributable earnings include Exxaro`s 20% share of the after tax    
profits of Sishen Iron Ore Company (Pty) Limited (SIOC) amounting to R1 762     
million, a contribution of R13 million from the effective 22% interest in the   
Chifeng zinc refinery and an equity accounted profit of R123 million from the   
26% interest in Black Mountain.                                                 
Headline earnings which exclude the impact of the impairment of the carrying    
value of assets in KZN Sands, were R2 514 million (729 cents per share),        
which is 31% lower than the R3 630 million (1 058 cents per share) for the      
corresponding period in 2008.                                                   
Cash flow                                                                       
Cash retained from operations was R2 118 million. This was primarily used to    
fund net financing charges of R382 million, tax payments of R892 million,       
dividend payments of R1 050 million and capital expenditure of R1 982 million   
of which R990 million was invested in new capacity and R992 million applied     
to sustaining and environmental capital. After the receipt of R1 754 million    
in dividends, primarily from SIOC, and the R1 082 million outflow to finalise   
the acquisition of the 50% interest in Mafube, the group had a net cash         
outflow of R1 620 million for the financial year. The final dividend for        
payment in April 2010 will amount to a further cash outflow of R357 million     
offset by the dividend inflow from SIOC of approximately R600 million.          
Net debt of R2 381 million at 31 December 2008 accordingly increased to R3      
731 million at a net debt to equity ratio of 29% at 31 December 2009.           
Safety, health and environment                                                  
Regrettably, an explosion in the maintenance contractor`s storage area          
situated at the Zincor business unit occurred on 10 September 2009, resulting   
in the deaths of three contractors and injuries to 12 others.                   
The average lost time injury frequency rate (LTIFR) per 200 000 man-hours       
worked improved by 15% from 0,39 in 2008 to 0,33 in 2009.                       
Thirteen business units are now ISO 14001 and OHSAS 18001 certified. The        
business units that did not achieve certification by end of 2009 will ensure    
that their programmes result in certification in 2010.                          
OPERATIONS                                                                      
Coal                                                                            
Total coal production volumes were marginally higher than the previous year.    
Power station coal production at the Eskom tied mines was 9% lower at           
16,486Mtpa mainly as a result of an inrush of water at Matla`s number 2 mine    
which impacted negatively on production for several months, but which has       
subsequently been rectified. This was partially offset by increased             
production at Arnot mine after ramping up the opencast mining operations to     
full production. The commercial mines increased production by 8% to over        
20Mtpa to meet the increased demand from Eskom.                                 
Coking coal production showed a marked decrease year on year, down 21% to       
2,020Mtpa, due to difficult geological conditions at Tshikondeni mine while     
semi-soft coking coal production decreased significantly at Grootegeluk mine    
as a result of lower demand from the steel and related industries.              
Steam coal production was 19% higher at 6,638Mtpa mainly due to the inclusion   
of production from Mafube of some 816kt following the acquisition of a 50%      
interest in the joint venture in June 2009. Higher production at the Inyanda    
and North Block Complex (NBC) mines was offset by lower production at           
Grootegeluk and Leeuwpan mines due to lower domestic steam coal demand.         
Production at New Clydesdale`s (NCC) new Diepspruit shaft also ramped up        
slower than anticipated.                                                        
38kt of char was produced at the four new retorts that were successfully        
commissioned at Grootegeluk mine. Ramp-up to full production is expected in     
the second half of 2010.                                                        
Sales to Eskom were in line with the previous year as increased sales volumes   
from the commercial operations were offset by lower sales volumes from the      
tied operations mainly due to production challenges at the Matla mine.          
Domestic sales were 16% lower at 4,587Mtpa due to lower demand during the       
recessionary climate.                                                           
In line with Exxaro Coal`s strategy, export volumes increased 44% year on       
year to 4,715Mtpa as Exxaro was able to secure additional export allocation     
at Richards Bay Coal Terminal (RBCT) from other RBCT users.                     
Revenue increased by 8% to R9 731 million as higher export volumes combined     
with increased domestic power station coal sales at higher prices were          
partially offset by lower domestic metallurgical and steam coal sales and       
lower export prices realised.                                                   
Despite the higher revenue, net operating profit decreased by 28% to R1 905     
million, at an operating margin of 20%, as above inflationary increases in      
electricity, rail tariffs and labour increased the cost of sales. Costs were    
further impacted by realised and unrealised exchange rate losses and an         
increase in exploration expenditure for the Moranbah South project in           
Australia.                                                                      
The operating profit from the tied operations was slightly down year on year    
as the environmental rehabilitation provision was reduced after extension of    
the life of mine at Matla mine.                                                 
MINERAL SANDS                                                                   
KZN Sands                                                                       
KZN Sands had significantly higher production volumes with both furnaces        
operational compared to one furnace being down for 10 months in 2008 after      
the water ingress incident in February 2008. Titanium slag tapped was 93kt      
higher at 205kt as both furnaces tapped more than 100kt of titanium slag. Low   
manganese pig iron and ilmenite production were respectively 58kt and 139kt     
higher than in 2008, in line with the increased slag production. Zircon and     
rutile production remained in line with 2008 despite the decrease in run of     
mine tonnes as a result of higher grades mined.                                 
Despite the increased production, revenue reduced by R269 million to R705       
million as lower sales volumes of zircon, pig iron and chloride slag were       
recorded at softer prices.                                                      
Net operating profit before impairments, was R43 million lower than for the     
corresponding period as the lower revenue combined with realised and            
unrealised foreign currency losses were only partially offset by improvements   
in production efficiencies and cost savings.                                    
The impairment of R1 435 million of the carrying value of the assets is         
mainly as a result of the decision taken in the latter part of 2009 not to      
proceed with the development of the Fairbreeze mine as a replacement            
feedstock producer for Hillendale mine. Hillendale is planned to close during   
the last quarter of 2012.                                                       
Australia Sands                                                                 
Improvement initiatives led to pigment production returning to 2007 levels      
with 2009 production a 23% improvement on the 2008 year. Zircon and rutile      
production increased as a result of higher grades and various improvement       
projects. Synthetic rutile production was slightly lower as a result of         
maintenance-related problems predominantly experienced in the second quarter    
of 2009.                                                                        
Revenue increased 12% to R1 469 million while net operating results improved    
from a loss of R82 million in 2008 to a loss of R2 million in 2009. This was    
achieved on the back of a much stronger production performance, higher          
pigment sales and higher average prices for both mineral and pigment products   
at a realised rate of USD0,79 to the AUD when compared with USD0,84 in 2008.    
Namakwa Sands                                                                   
The impact of the global recession on operations resulted in the postponement   
of the Furnace 1 start-up which was shut down for a reline at the end of        
March 2009. Furthermore, production activities at the mine and separation       
plants were temporarily halted during August to preserve cash flow and avoid    
the build up of stocks.                                                         
Total annual sales of 299kt were down 28% on the previous year`s record of      
416kt.                                                                          
Net operating profit for only three months in 2008 of R155 million was          
followed by a loss in the 2009 financial year of R110 million. Softer prices    
albeit at a marginally weaker local currency, realised and unrealised           
exchange rate losses, and the R55 million derecognition of the preheaters due   
to their deteriorated condition, all added to the weaker financial results.     
BASE METALS                                                                     
Lead and zinc production at the Rosh Pinah mine was in line with 2008 with      
lead concentrate exports 14% lower than the corresponding period in 2008.       
Production of zinc metal at the Zincor refinery of 87kt was 338 tonnes more     
than in 2008, but was adversely affected by downtime on the acid plant as       
well as the disruption caused by the explosion in September 2009. Domestic      
zinc metal sales were in line with 2008.                                        
A total of 60% of Rosh Pinah`s projected zinc and lead concentrate sales are    
hedged to December 2011 at average forward prices ranging from USD2 216 to      
USD2 061 for zinc and USD1 967 to USD1 713 for lead. Hedging gains realised     
were Namibian dollars 25 million more than in 2008.                             
Revenue for the 12 months to 31 December 2009 decreased by 14% mainly as a      
result of the lower average realised US dollar zinc price. The average zinc     
price for 2009 of USD1 658 is 12% lower than in 2008 and was only partially     
offset by the slightly weaker local currency.                                   
A turnaround from a net operating loss in 2008 of R172 million to a loss of     
R8 million was reported due to cost savings initiatives implemented as well     
as the upwards revaluation of inventories at the Zincor refinery at year end.   
The impact of above inflationary increases in electricity and maintenance       
expenses are however still being experienced.                                   
Production at the Chifeng refinery was in line with 2008. Equity accounted      
income from this operation increased by R17 million to                          
R13 million mainly due to reduced production costs as well as a reduction in    
the rates of the environmental duties paid.                                     
Exxaro`s 26% share in Black Mountain, acquired in the last quarter of 2008,     
contributed R123 million to equity income due mainly to increased sales         
volumes.                                                                        
OTHER                                                                           
Production volumes at the FerroAlloys plant were slightly higher while Glen     
Douglas production volumes were lower due to unplanned plant stoppages.         
Revenue for 2009 decreased marginally when compared to the previous year due    
to the lower demand and selling prices. Sales volumes were lower at both Glen   
Douglas and FerroAlloys.                                                        
CAPITAL EXPENDITURE AND PROJECT PIPELINE                                        
As announced on 1 December 2009, Exxaro reviewed its commodity portfolio and    
growth pipeline against the background of the prevailing economic climate to    
align resources with a commodity strategy best positioned to release optimal    
value for all stakeholders.                                                     
Following this review Exxaro plans to reconfigure its zinc assets in order to   
ultimately divest from them in an optimal manner. The portfolio of zinc         
assets includes the Zincor refinery in Springs, Gauteng, a 50,04% interest in   
the Rosh Pinah zinc and lead mine in Namibia, a 26% interest in Black           
Mountain which owns the Black Mountain zinc and lead mine and the Gamsberg      
zinc project in the Northern Cape, and an effective 22% interest in the         
Chifeng zinc smelter in China.                                                  
COAL                                                                            
Detail engineering on the expansion of the Grootegeluk mine to supply Eskom`s   
new Medupi power station with 14,6Mtpa of power station coal for 40 years is    
progressing in order to be able to supply the first coal to Eskom during the    
second quarter of 2012 which coincides with the start-up of the power           
station. Full production from 2015 is anticipated.                              
As previously reported, Exxaro received notice from Eskom, in the third         
quarter of 2009, that it was seeking to review certain commercial terms         
contained in the Medupi Coal Supply and Off-take Agreement (CSA) signed on 19   
September 2008, including the coal price escalation mechanism and the coal      
delivery ramp-up. Pending the outcome of the review process, Exxaro`s funding   
programme was temporarily suspended in December 2009 as well as the placement   
of additional contracts associated with the project. It is expected that the    
review process will be concluded in the first quarter of 2010. Due to the       
delays in the project execution, it is expected that the capital cost           
associated with the project will now increase from R9 billion to R9,5           
billion.                                                                        
The Thabametsi Project pre-feasibility study to develop a potential green       
fields mine adjacent to the Grootegeluk mine, with the capability of            
supplying the market with power station and metallurgical coal, is scheduled    
for completion by end March 2010. Implementation of this project is linked to   
Eskom`s future developments in the Waterberg together with the establishment    
by the Department of Energy of an appropriate enabling environment to allow     
for new generation capacity in terms of Eskom`s multi-site base load            
Independent Power Producer (IPP) programme. The scope of the bankable           
feasibility study will only be finalised after the details of potential new     
generation capacity has been determined, whereafter the required technical      
studies will commence. The environmental studies have commenced at the end of   
2009 and are due to be completed during 2011. First coal production could be    
expected by 2015.                                                               
Exxaro entered into a prospecting joint venture agreement with Sasol Mining     
for the development of a new coal mine in the Waterberg to supply Sasol`s       
potential new 80 000 barrels per day inland coal to liquids facility (Project   
Mafutha). The project is in the pre-feasibility stage and a decision to         
proceed to a bankable feasibility study is expected in 2010.                    
An integrated infrastructure plan is being implemented for the Waterberg coal   
fields together with the relevant stakeholders. Focus areas include the         
supply of raw water to the area, rail, road and housing.                        
After the successful commissioning of the Sintel Char plant at Grootegeluk      
mine for the production of reductants for the ferroalloy industry, Exxaro is    
currently evaluating the Phase 2 expansion to produce a further 140ktpa of      
char.                                                                           
Exploration of the hard coking coal resource on the Moranbah South properties   
in the Bowen Basin of Queensland Australia is progressing well and the          
results obtained are very encouraging. Moranbah South, which is a 50% joint     
venture with Anglo American, has the potential to produce premium quality       
hard coking coal.                                                               
ENERGY                                                                          
The commodity portfolio review announced on 1 December 2009 stated the          
group`s intention to explore opportunities in the energy markets. Clean         
energy initiatives encompassing co-generation, carbon credit trading, and       
renewable energy (wind and solar projects), are progressing well.               
Development of the first five spot test for the Coal Bed Methane project in     
Botswana, with the aim of testing for economic gas flow is progressing well.    
Completion of the test work is planned for April 2010 after which the site      
will be operated until economic gas flow has been attained.                     
MINERAL SANDS                                                                   
As a result of the decision to not continue with the development of the         
Fairbreeze mine, the group will plan for the closure of the KZN Sands           
operations during the next five years while in parallel investigating other     
feedstock alternatives and the continuation of the business should the          
outlook for the mineral sands industry improve substantially.                   
The implementation of the Tiwest Kwinana pigment expansion project which will   
increase production by 40ktpa is progressing according to plan with             
commissioning targeted for the second half of 2010. Exxaro is funding 100% of   
the expansion project of which the capital expenditure is now projected at      
some AUD118 million.                                                            
BASE METALS                                                                     
Base Metals activities are focused on the process of optimisation for           
divestment. It is expected that potential suitors will be approached in the     
second half of 2010.                                                            
FERROUS                                                                         
The final evaluation of the iron ore project in Turkey concluded that it did    
not meet the Group`s investment criteria and a decision was made to divest      
from the project.                                                               
CONVERSION OF MINING RIGHTS                                                     
Engagement with the relevant stakeholders continues in order to process the     
registration of the new order mining rights granted as well as the converted    
old order mining rights of the former Kumba Resources Limited. Approval of      
the conversion of the old order mining rights of the former Eyesizwe Coal       
(Pty) Limited submitted in 2008, is awaited.                                    
CHANGES TO THE BOARD                                                            
Ms Simangele Mngomezulu resigned with effect from 21 December 2009. The board   
expresses its appreciation for her contribution to the board. Ms Noluthando     
Langeni was appointed to the board in her stead with effect from 23 February    
2010. The acting chairman, Dr Len Konar, was elected as chairman of the board   
with effect from 23 February 2010.                                              
OUTLOOK                                                                         
The rate of recovery from the global recession remains uncertain despite a      
number of positive indicators.                                                  
The group expects the global demand for coal to increase, with the demand for   
local power station coal anticipated to remain strong. The domestic demand      
for steam and metallurgical coal is however expected to be firmer but still     
to remain subdued in 2010.                                                      
Coal exports may be affected by the availability of rail and port allocation    
at RBCT.                                                                        
For the mineral sands commodities, higher production and sales volumes are      
anticipated at prices which, although still under pressure, are showing signs   
of recovery.                                                                    
The base metals business is expected to remain under pressure in 2010 as a      
global zinc oversupply situation may result in downward pressure on zinc        
prices in the second half of 2010, while local demand is anticipated to         
remain stable.                                                                  
Based on current market expectations on iron ore price increases anticipated    
with effect from 1 April 2010 coupled with strong demand, the equity            
accounted contribution from SIOC may have a positive impact on Exxaro`s         
earnings.                                                                       
The introduction of the payment of royalties with effect from 1 March 2010      
will have a negative impact on the group`s operating results, most notably      
for the coal business.                                                          
Overall, the group`s consolidated results for 2010 will largely be driven by    
the recovery in demand and the prices for its commodities, as well as by the    
trading levels of the local and Australian currencies. The group will           
continue with its strong focus on capital prioritisation and working capital    
management together with rigorous cost control.                                 
The financial information on which the outlook statement has been based has     
not been reviewed or reported on by the company`s external auditors.            
FINAL DIVIDEND                                                                  
The board of directors has declared a final cash dividend number 14 of 100      
cents per share in respect of the 2009 financial year end. The dividend has     
been declared in South African currency and is payable to shareholders          
recorded in the register of the company at close of business on Friday,         
16 April 2010.                                                                  
In compliance with the requirements of Strate the electronic and custody        
system used by the JSE, the following dates are applicable:                     
Last date to trade cum dividend       Friday, 9 April 2010                      
Shares trade ex dividend              Monday, 12 April 2010                     
Record date                           Friday, 16 April 2010                     
Payment date                          Monday, 19 April 2010                     
Share certificates may not be dematerialised or rematerialised during the       
period Monday, 12 April 2010 and Friday, 16 April 2010 both days inclusive.     
On Monday, 19 April 2010 the final cash dividend will be electronically         
transferred to the bank accounts of all certificated shareholders where this    
facility is available. Where electronic fund transfer is not available or       
desired, cheques dated 19 April 2010 will be posted on that date.               
Shareholders who have dematerialised their share certificates will have their   
accounts at their CSDP or broker credited on Monday, 19 April 2010.             
On behalf of the board                                                          
SA Nkosi                       WA de Klerk                                      
(Chief Executive Officer)     (Finance Director)                                
25 February 2010                                                                
Registered office                                                               
Exxaro Resources Limited                                                        
Roger Dyason Road,                                                              
Pretoria West, 0183                                                             
Telephone +27 12 307 5000                                                       
Fax +27 12 307 4080                                                             
Transfer secretaries                                                            
Computershare Investor Services (Pty) Limited                                   
Ground Floor, 70 Marshall Street, Johannesburg, 2001                            
PO Box 61051, Marshalltown, 2107                                                
Directors                                                                       
SA Nkosi* (Chief Executive Officer), WA de Klerk (Finance Director)*,           
JJ Geldenhuys, CI Griffith, U Khumalo, Dr D Konar (Chairman), N Langeni, VZ     
Mntambo, RP Mohring, NL Sowazi, J van Rooyen, D Zihlangu     *Executive         
Company secretary                                                               
MS Viljoen                                                                      
Investor relations                                                              
RA de Beer (+27 12 307 4189)                                                    
If you have any queries regarding your shareholding in Exxaro Resources,        
please contact the Transfer Secretaries at +27 11 370 5000.                     
Pretoria                                                                        
25 February 2010                                                                
Sponsor                                                                         
Deutsche Securities (SA) (Pty) Limited (+27 11 775 7000)                        
Date: 25/02/2010 07:05:34 Supplied by www.sharenet.co.za                     
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