Exxaro Announces Impressive Interim Performance

Exxaro Resources, a diversified mining corporation, has released a mixed bag of interim results for the six months ending June 2026. While the company benefited from strong cash generation and sustained performance in its coal and renewable energy sectors, this was counterbalanced by a significant drop in equity-accounted income from its investments in Sishen Iron Ore Company (SIOC) and Black Mountain, which operates an underground base metal mine.

Revenue increased by 7% to R22.1 billion, and earnings before interest, taxes, depreciation, and amortisation (Ebitda) remained stable at R5.6 billion, despite ongoing inflationary pressures. This stability is attributed to the resilient nature of the coal and energy portfolio.

The company reported a 20% decrease in headline earnings per share to R13.77, primarily due to a 39% decline in adjusted equity-accounted income, which fell to R1.4 billion.

Most of this decline originated from Black Mountain, where earnings plummeted to R1 million from R289 million a year prior, adversely affected by rising production costs and a slower ramp-up at the Gamsberg open-pit zinc mine and processing facility, located in the Northern Cape.

Exxaro share price

Sishen’s results were adversely impacted by a stronger rand, which weighed on the rand value of dollar-denominated iron ore earnings, compounded by above-inflation increases in key mining input costs compared to the previous period.

The lower earnings were somewhat mitigated by the inaugural contribution from Exxaro’s newly acquired manganese interest, Tshipi, which impacted earnings for four months and represented a significant step in diversifying the group’s income base beyond coal.

Nonetheless, coal remained the leading contributor to the company’s performance. Production increased by 11% to 21.5 million tonnes, boosted by stronger output from the Matla and Grootegeluk operations, while total sales rose 4% to 19.9 million tonnes, supported by higher Eskom offtake at Matla and improved export volumes.

Export sales climbed 15% to 3.9 million tonnes, aided by better performance from Transnet Freight Rail, even as challenges on the Waterberg line persisted.

Unit costs increased by 4.6% to R681 per tonne, which is generally in line with inflation trends.

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Exxaro has renewed its long-term coal supply agreement with Eskom for the Matla coal station and has also secured a 19-year extension of the mine’s mining right, ensuring the operation’s role in South Africa’s energy supply for years to come.

In its results commentary, the company remarked that higher and more volatile oil prices have brought renewed attention to the significance of energy security, prompting a more pragmatic view regarding coal’s role as a reliable and dispatchable energy source.

Despite the drop in earnings, the board sanctioned an interim dividend of 700 cents per share, marking Exxaro’s 47th consecutive dividend since its listing in 2006.

Cennergi, the company’s renewable energy division, saw a 12% increase in generation to 378 gigawatt-hours, bolstered by the Lephalale Solar Project, which commenced commercial operations in April and has already reduced Grootegeluk’s dependence on Eskom power by 30%. However, Exxaro lowered its full-year guidance for renewable output due to weaker-than-expected wind conditions at Cennergi’s Amakhala Emoyeni and Tsitsikamma facilities.

Exxaro also achieved its best safety performance since going public, recording four consecutive years without a fatality.

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