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Demand for coal will continue
Strong demand for local power station coal is expected to continue, coal and zinc producer Exxaro said on Tuesday as it released its annual results.
However, coking coal sales were anticipated to be lower at reduced prices. Steam coal sales volumes should increase, but at lower international prices, the company said.
For the year ended December 31, 2008, Exxaro said net operating profit increased 71 percent to R2.5-billion while revenue rose 36 percent to R13.8-billion.
The company reported headline earnings of 1058 cents per share, while a final dividend of 200 cents per share was declared, bringing the total dividend to 375 cents per share.
Production volumes for the coal commodity business overall were nine percent higher than the previous year, Exxaro said.
Power station coal production at the mines supplying Eskom "was significantly higher". This was due to a good turnaround at the Arnot mine after successful implementation of improvement initiatives.
Exxaro said the commercial mines, most notably North Block Complex (NBC) and Inyanda, increased production to supply higher demand from Eskom.
NBC started mining new reserves and increased overall capacity.
Coking coal production, however, decreased by 402 000 tons in 2008 due to challenging geological and mining conditions at Tshikondeni, Exxaro said.
The group said its consolidated results for 2009 would largely be driven by the global economy's impact on demand and prices for its commodities, as well as the trading levels of the local and Australian currencies.
"The uncertain market outlook remains a key factor to the group's results for 2009."
Exxaro is the fourth-largest South African coal producer with operations in Namibia, Australia and China. |
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