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EXXARO RESOURCES LIMITED - Exxaro - Trading Statement for the year ended 31 December 2020

Release Date: 15/03/2021 07:05
Code(s): EXX EXX04 EXX05     PDF:  
Wrap Text
Exxaro - Trading Statement for the year ended 31 December 2020

Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
JSE share code: EXX
ISIN: ZAE000084992
Bond Code: EXX04
ISIN No: ZAG000160326
Bond Code: EXX05
ISIN No: ZAG000160334
(“Exxaro” or the “Company”)


Shareholders are advised that Exxaro and its directors have a reasonable degree of certainty relating to the
expected financial results of Exxaro for the year ended 31 December 2020.

Headline earnings per share (“HEPS”) for the year ended 31 December 2020 are expected to decrease
between 0% and 6% compared to the year ended 31 December 2019. This was mainly due to the accounting
of non-controlling interest for the outside shareholders of Eyesizwe RF Proprietary Limited (“Eyesizwe”) for
the full year compared to only two months during the 2019 financial year, partially offset by better profitability
from Exxaro’s own operations and higher income from the Company’s equity-accounted investments.

Attributable earnings per share (“AEPS”) for the year ended 31 December 2020 are expected to decrease
between 35% and 21% compared to the year ended 31 December 2019. In addition to the accounting of non-
controlling interest for the external shareholders of Eyesizwe in the current period, the financial results in both
periods were influenced by various once-off items, such as the gain on the partial disposal of Tronox Holdings
plc and the redemption of the membership interest in Tronox UK in the comparative year (+R2 335 million)
and impairment charges (-R1 882 million) in the current year, partially offset by a gain on the deemed disposal
of the previously held 50% equity interest in the Cennergi Proprietary Limited (“Cennergi”) joint venture (+R1
321 million), during the current year. Impairment charges relate mainly to our Exxaro Central Coal (“ECC”)
mine. Our income from equity-accounted investments is higher than the comparable year, mainly due to our
investment in Sishen Iron Ore Company Proprietary Limited.

EBITDA (1) for the year ended 31 December 2020 are expected to increase between 13% and 27% compared
to the year ended 31 December 2019. Whilst Exxaro’ s operations were declared an “essential service” during
the lockdown periods and able to operate, the environment remained challenging. However, the Company’s
own managed operations were resilient, resulting in higher commercial coal revenue and record coal export
volumes, albeit at lower US dollar prices, but benefiting from a weaker exchange rate during the year.
Following the acquisition of the remaining 50% equity interest, Cennergi is now consolidated from 1 April
2020. Operating costs were negatively impacted by inflationary pressure, additional distribution costs related
to higher export volumes and higher buy-in costs for coal, partially offset by foreign exchange gains and the
positive impact of the higher discount rates used in rehabilitation provisioning.

After adjusting for non-core items (2) for both financial years core HEPS (3) for the year ended
31 December 2020 are expected to increase between 17% and 31%, compared to the year ended
31 December 2019.

Core EBITDA (1) for the year ended 31 December 2020 are expected to increase between 16% and 30%,
compared to the year ended 31 December 2019.

The expected ranges are summarised below: -
                    30 December 2019                 31 December 2020                   31 December 2020
                    Reported earnings                Expected earnings                  Expected range
 HEPS               3 027 cents                      2 845 – 3 027 cents                0% - 6% decrease
 AEPS               3 908 cents                      2 540 – 3 087 cents                21% - 35% decrease
 EBITDA (1)         R5 953 million                   6 727 – 7 560 (R Million)          13% - 27% increase
 Core HEPS (3)      2 354 cents                      2 754 – 3 084 cents                17% - 31% increase
 Core EBITDA        R5 832 million                   6 765 – 7 582 (R Million)          16% - 30% increase

Shareholders are advised that Exxaro will release its reviewed financial results for the year ended
31 December 2020 on 18 March 2021. Further details are available on our website,

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 JSE Listings Requirements.
(1) EBITDA is calculated by adjusting net operating profit before tax with depreciation, amortisation, impairment
charges/reversals and net losses or gains on disposal of assets and investments (including translation
differences recycled to profit or loss).
(2) Non-core items are defined as gains and losses on transactions adjusted in the calculation of headline
earnings plus any other gains or losses relating to major non-recurring transactions or corporate actions,
which is identified by management at each reporting period.
(3) Core HEPS are the same as core AEPS.

These are not defined terms under International Financial Reporting Standards (IFRS) and may not be
comparable with similarly titled measures reported by other companies. The afore-mentioned adjustments
are the responsibility of the directors of Exxaro. The adjustments have been prepared for illustrative purposes
only and due to their nature, may not fairly present Exxaro´s financial position, changes in equity, results of
operations or cash flows and will be detailed in the reviewed financial statements.

Editor’s note:
Exxaro is one of the largest South African based diversified resources companies, with interests in the coal,
titanium dioxide, iron ore and energy.

Mzila Mthenjane, Executive head: Stakeholder Affairs
Tel: + 27 12 307 7393
Mobile: +27 83 417 6375

15 March 2021

Lead Sponsor to Exxaro Resources Limited
Absa Corporate and Investment Bank, a division of Absa Bank Limited

Joint Equity Sponsor to Exxaro Resources Limited
Tamela Holdings Proprietary Limited

Date: 15-03-2021 07:05:00
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