JOHANNESBURG (miningweekly.com) – Strong demand and generally higher prices across the majority of its commodity basket boosted Exxaro Resources’ earnings in 2011, the JSE-listed diversified miner said on Friday.

Exxaro said its headline earnings for the year ended December 31 could be between 27% and 43% higher than those of the previous financial year.

However, the gains in profit were partially offset by a stronger average realised South African rand and Australian dollar against the US dollar.

“The coal business is expected to deliver higher operating profit than the corresponding period in 2010, primarily due to higher export volumes at higher international selling prices, despite lower sales volumes from operations captive to Eskom,” the miner said in a statement.

It expected that the mineral sands business would also report a higher operating profit than the corresponding period in 2010, owing to a general increase in selling prices of its products, in addition to the partial impairment reversal of about R869-million of the carrying value of the property, plant and equipment at the KwaZulu-Natal (KZN) Sands operations.

However, Exxaro said the base metals business is likely to post an operating loss owing to the decision taken by the board to cease operations at the Zincor refinery, compounded by an impairment of R516-million of the carrying value of the Zincor property, plant and equipment.

Headline earnings a share, which exclude the impact of the impairment of the carrying value of the Zincor property, plant and equipment, as well as the impact of the partial impairment reversal of the carrying value of the KZN Sands property, plant and equipment for the year were expected to be between 1 901c and 2 140c.

Attributable earnings for the year were expected to be between R6.96-billion and R7.81-billion. This equated to attributable earnings a share of between 2 001c and 2 243c, representing an increase of between 33% and 49% when compared with the corresponding period in 2010.
 

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