JOHANNESBURG (miningweekly.com) – Diversified mining company Exxaro Resources delivered a strong performance in the 12 months to December 31, with its higher net operating profit boosted by higher coal selling prices.

The headline earnings of the JSE-listed company, headed by CEO Mzolisi Mgojo, were 185% higher at R4 621-million.

Consolidated group revenue rose 14% to R20 897-million, while group net operating profit increased by 64% to R5 200-million.

Earnings of R5 679-million eclipsed last year’s R296-million and cash flow generated by operations increased by R1 023-million to R5 549-million compared with 2015’s R4 526-million.

This cash flow was sufficient to cover capital expenditure of R2 780-million, dividends of R625-million, net financing charges of R459-million and tax of R547-million.

Income from equity-accounted investments also increased substantially to R2 373-million, from 2015’s loss of R1 137-million, on the recovery in iron-ore export selling prices and lower losses of R1 119-million from its investment in the mineral sands company Tronox.

Cost savings of R235-million were achieved through the implementation of the company’s improvement project.

A 15%-lower average spot exchange rate of R14.69 to the dollar was recorded in the 12 months to December 31, compared with R12.76 in 2015.

The company also gained R670-million on the disposal of the Mayoko iron-ore project in the Congo Republic.

Debt was cut to R1 322-million from R3 012-million at the end of 2015, equating to a net debt to equity ratio of 3.8%, well down on the previous 8.8%.

Exxaro’s capital structure remains robust with the company refinancing its R8-billion term loan facility at attractive terms, despite Standard and Poor’s downgrading of Exxaro's domestic credit rating.

Total dividends paid in 2016 amounted to R625-million, made up of a final dividend of R304-million and an interim dividend of R321-million.

The final dividend of 410c a share, subject to a dividend withholding tax of 20% set in the latest Budget, amounts to R1 289-million.

Exxaro has restructured the shareholding in South Dunes Coal Terminal (SDCT) for a direct interest in the Richards Bay Coal Terminal (RBCT), resulting in a R203-million gain on disposal of SDCT and a R35-million excess of fair value over cost of the investment in RBCT on the additional 20 000 shares acquired in RBCT.

The total purchase consideration of the additional RBCT investment amounted to R297-million.

Exxaro has formally objected against a step taken by South African Revenue Services (SARS) to subject it to South African income tax of R442-million on investments outside of the country.