Exxaro is encouraged by improvements in South Africa’s logistics and energy availability, CEO Ben Magara said Thursday.
The South African coal, iron ore, and renewable energy company reported a 20% fall in interim headline earnings per share to R13.77, despite revenues for the same period swinging up by 7% to R22.1 billion.
Half-year dividends for the period also slumped from R8.43 to R7. Improved logistics are critical for Exxaro because they directly affect its ability to move coal and other commodities efficiently to domestic and export markets. In South Africa, rail and port bottlenecks have historically constrained mining companies, limiting export volumes and eroding revenue.
Magara said the improvement in logistics, energy availability, and grid stability” in South Africa is enouraging and will aid production and shipments of the country's products.
This was after Transnet Freight Rail tipped 30.95 million tonnes of coal at Richard Bay Coal Terminal during the half-year period under review, which translates to an annualised 59.9 million tonnes.
This reflects a 5% year-on-year improvement in performance compared to the previous year, said Magara. “This improvement reflects an enhanced and more responsive rail system, despite continued operational constraints. The Grootegeluk direct rail flow remains a key focus area of the business,” he said.
Exxaro would continue utilising third-party sidings in Mpumalanga to ship coal from Grootegeluk. Apart from logistics bottlenecks,
Magara said the South African domestic market is battling the effects of global geopolitical and energy supply disruptions. Local industrial end-users are facing margin compression due to elevated diesel costs, which is exerting pressure on operating expenses and profitability.
Nonetheless, domestic coal demand has remained relatively resilient, supported by stable offtake performance. This comes as South African electricity demand has remained below available supply, thereby reducing the operational requirements of Eskom’s coal-fired power stations and consequently impacting coal offtake.
Coal offtake in the Waterberg has been lower due to the continued application of Eskom’s cold reserve and operational challenges. However, Exxaro’s coal offtake at Matla remained robust, supported by improved coal quality and a stable, sustainable supply from the Matla Mine.
Exxaro lifted half-year coal production by 11% to 21.5 million tonnes, underpinned by improved output from Grootegeluk as well as robust ramp-up at Matla. Coal sales for the period firmed up 4% to 19.9 million tonnes.
Export coal sales rose 15% to 3.9 million tonnes, facilitated by improved performance by Transnet Freight Rail and the effective use of alternative logistics channels. This helped Exxaro to attain 91% price realisation against the average API4 benchmark prices of $106 per tonne under volatile market conditions.
The company’s coal resource base stands at over nine billion tonnes. The company generates about 60% of its coal revenue from long-term domestic utility contracts. Coal earnings before interest, tax, depreciation, and amortisation (Ebitda) grew 5% for the half-year to about R5bn.
Exxaro also has a presence in renewable energy and manganese. Its renewable energy business saw energy generation increase by 12% to 378 GWh. Operational Ebitda for the renewable energy operations grew 2% to R548m as the group targets 1,600 MW of net installed capacity by 2030.
Overall cash generation for the period firmed up 15% to R6.1bn, allowing Exxaro to fund sustaining capital, energy expansion capital, and dividends. However, headline earnings decreased by 24% to R3.2bn, largely due to lower equity-accounted income from SIOC and Black Mountain, the company said.
This was, however, partially offset by the positive contribution from manganese, which contributed to the group earnings for the first time for the last four months of the reporting period. Exxaro’s manganese marketing business reported positive Ebitda of R29m for the period from March 1, to June 30, 2026, attributable to the sales and marketing of Exxaro’s 50.1% share of Tshipi ore.