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Johannesburg - Exxaro Resources said Thursday that for the 12 months ended December 2009, its headline earnings per share are expected to be between 700 cents and 740 cents, representing a decrease of between 34% and 30% when compared to the corresponding period in 2008.
Attributable earnings, which were adversely impacted by the impairment, are expected to be between R975m and R1.040bn. This equates to attributable earnings per share of between 283c and 301c representing a decrease of between 72% and 70% when compared to the corresponding period in 2008.
The company said in a trading statement that consolidated net operating profit for the group will be significantly lower than for the corresponding period in 2008 as the recessionary conditions had an adverse impact on coal export prices and the demand for mineral sands products.
Export revenue at weaker average exchange rates were offset by currency losses on repatriation of foreign currency proceeds, as well as unrealised foreign currency losses on the revaluation of monetary items in foreign currency based on the relative strength of the local currency.
Exxaro's coal business will reflect a decrease of between 25% and 30% in net operating profit for the period mainly due to the softer domestic market conditions for metallurgical coal and steam coal which was partially offset by higher export volumes and higher local power station volumes and prices.
The mineral sands business, in which all three business operations recorded a net operating loss, will report a decrease in net operating profit of about R1.7bn when compared to the corresponding 12 months ended December 2008 mainly due to an impairment of R1.4bn of the carrying value of the assets of the KwaZulu-Natal operation as communicated to shareholders on December 1 2009.
Lower net operating profit for the Namakwa Sands operation, due to reduced demand, was offset by improved operating results from the Australia Sands operation for the 12 months, albeit still at a loss, resulting from increased production performance and higher sales and prices for both mineral and pigment products.
This was despite operating results being adversely impacted by the relative strength of the Australian dollar.
While still reporting a small loss, the operating results of the base metals business for the 12 months were better that those achieved in the corresponding period in 2008.
Exxaro will release its results on 25 February 2010.
- I-Net Bridge
