Exxaro coal production / sales volume to decrease by 14% / 12%
As of 31 May 2024, the group has achieved a total of twenty-one months without a work-related fatality. The current performance indicates a 25% improvement when compared to the same period last year (1H23: 0.08). Exxaro has recorded zero high potential incidents across the group, compared to 4 for the full year ended 31 December 2023.
After a soft start to 2024, the global economic growth prospects improved, mainly led by upward revision to the anticipated economic performances for the US, the eurozone, UK and India. Following a higher-for-longer headline consumer price index in the US, the initial policy rate reductions were postponed, and anticipated to take effect during the second half of 2024.
With respect to Exxaro’s key commodities, the average benchmark API4 Richards Bay Coal Terminal (RBCT) export price for 1H24 is expected to average US$101 (2H23: US$112) per tonne, free on board (FOB), a decline from the previous six months, and the iron ore fines price for 1H24 is expected to average US$117 (2H23: US$121) per dry metric tonne, cost, and freight (CFR) China.
Total coal production (including buy-ins) and sales volume for 1H24 are expected to decrease by 14% and 12% respectively, mainly due to the reduced demand from Eskom at Grootegeluk, based on their latest internal plan.
In terms of its capital allocation programme, Exxaro expects the capital expenditure for 1H24 in its coal business to be about 33% lower, due to lower sustaining capex spend at the Grootegeluk complex.
As at 31 May 2024, the group had net cash of R15.3 billion (excluding energy’s net debt of R4.2 billion). The group therefore has sufficient liquidity and will remain a going concern for the foreseeable future.
Exxaro will provide a detailed account of 1H24 business performance and an outlook on the subsequent six months (2H24) when it announces its interim results on or about 15 August 2024.
