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Exxaro Resources Limited - Finalisation Of Total Coal South Africa Pty Ltd Acquisition And Trading Statement For Year Ended 31 Dec 2015

Release Date: 25/02/2016 12:30:00      Code(s): EXX     
Ltd acquisition and trading statement for year ended 31 Dec 2015

Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
JSE share code: EXX
ISIN: ZAE000084992
(?Exxaro? or ?the company? or ?the group?)


Further to the trading statement published on SENS on 11 November 2015, the earnings range for the
group attributable and headline earnings are now reasonably confirmed. As such, and in compliance
with the Listings Requirements of the JSE Limited (?Listings Requirements?), Exxaro is required to
issue a further trading statement informing shareholders of these ranges.

Shareholders are advised that Exxaro has completed the purchase price allocation accounting relating
to the acquisition of Total Coal South Africa Proprietary Limited (?TCSA?) as required by the
International Financial Reporting Standards.  Exxaro acquired TCSA on 20 August 2015, where after 
TCSA was renamed Exxaro Coal Central Proprietary Limited (?ECC?).

ECC is included in the coal commercial operations? results with effect from 1 September 2015.

On finalisation of the purchase price allocation accounting, goodwill relating to the transaction
amounting to R1 524 million was recognised.

The carrying value of the ECC operations was assessed to be sensitive to the coal index price and
R/US$ exchange rate. At 31 December 2015, these operations were assessed against these
indicators for impairment. The 12% decrease in the export coal prices from transaction signature date
to the reporting date, partially offset by the weakening of the R/US$ exchange rate in the same period,
and further assessment considerations, resulted in an impairment of R1 524 million goodwill at 31
December 2015.

The current weakness in the ferrochrome industry and the lack of demand for the semi-coke product
has resulted in the group placing the Reductants business?s four retorts on care and maintenance for
an indefinite period. This resulted in an impairment of the carrying value of Reductants property, plant
and equipment of R225 million at 31 December 2015.

Table1: Expected earnings ranges

Year ended        Net operating   Attributable     Headline         Weighted    Attributable    Headline                                
31 December       profit/(loss)   earnings/(loss)  earnings range   average     earnings/       Earnings 
                  range           range                             of number   (losses)        per share                                                                          
                                                                    shares      per share                                                 
                  Lower   Upper   Lower    Upper   Lower   Upper                Lower   Upper   Lower   Upper
                  R'm     R'm     R'm      R'm     R'm     R'm      Mil         cents   cents   cents   cents
2015 - expected   2855    3267    243      312     1337    1718     355         68      88      377     484
2014 - actual        (3 292)          (883)            4 869        355            (249)            1 372

The group?s net operating loss reported for the year ended 31 December 2014 is expected to improve
by between R6 147 million and R6 559 million (187% - 199%) for the year ended
31 December 2015, primarily due to the non-recurring pre-tax impairment loss recorded in 2014 for
the Mayoko iron ore project of R5 760 million.

The coal business is expected to report a decrease in net operating profit for the year ended 31
December 2015 compared to 2014, mainly due to the:
-       Impairment of the carrying value of ECC goodwill of R1 524 million, and the carrying value of
        property, plant and equipment of the reductants operation of R225 million
-       Non-recurring Grootegeluk Medupi Expansion Project shortfall income of R1 466 million
        recorded in 2014
  partly offset by higher
-       Revenue as a result of higher Eskom sales due to the Medupi power station ramp-up in 2015
-       Export volumes mainly due to the inclusion of ECC since September 2015, albeit at lower
        average rand selling prices.

Group headline earnings for the year ended 31 December 2015 are expected to be between R3 151
million and R3 532 million (65% - 73%) lower than the comparative year ended
31 December 2014, primarily due to the expected decrease in equity-accounted income from
investments as a result of lower commodity prices (iron ore, mineral sands and pigment) as well as
non-recurring items recorded by these investments in 2015. As such, headline earnings per share
(?HEPS?) are also likely to be between 888 and 995 cents (65% - 73%) lower than the comparative

Group attributable losses for the year ended 31 December 2014 are likely to improve by between R1 126 million
and R1 195 million (128% - 135%)for the year ended 31 December 2015, due to the reasons listed above. As such 
the attributable losses per share (?ALPS?) recorded in 2014 are also likely to improve by between 317 and 
337 cents for the year ended 31 December 2015.

Shareholders are advised that Exxaro will release its reviewed annual financial results for the year
ended 31 December 2015 on 3 March 2016.

The forecast financial information on which this trading statement is based has not been reviewed,
audited nor reported on by Exxaro?s external auditors.

This statement is issued in compliance with the Listings Requirements.

Editor?s note:
Exxaro is one of the largest South African based diversified resources companies, with interests in the
coal, titanium dioxide, ferrous and renewable energy commodities. www.exxaro.com

Wim de Klerk
Finance Director
Tel: + 27 12 307 4848
Mobile: +27 82 652 5145
Email: wim.deklerk@exxaro.com

25 February 2016

Absa Bank Limited (acting through its Corporate and Investment Bank Division)

Date: 25/02/2016 12:30:00 Supplied by www.sharenet.co.za                     
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