JSE-listed Exxaro Resources expects its headline earnings per share (HEPS) for the six months ended June 30 to decrease by between 18% and 34% and 18% year-on-year.

Attributable earnings per share (EPS) for the six-month period are expected to decrease by between 27% and 43% year-on-year.

This was mainly as a result of the accounting of noncontrolling interest for the outside shareholders of Eyesizwe RF.

In addition to the accounting of noncontrolling interest for the external shareholders of Eyesizwe RF in the current period, the financial results in both periods were influenced by various one-off items, including the gain on the partial disposal of Tronox Holdings and the redemption of the membership interest in Tronox UK in the comparative period, as well as a gain on the deemed disposal of the previously held 50% equity interest in the Cennergi joint venture.

Exxaro’s income from equity-accounted investments is also lower than the comparable period, mainly owing to its investment in Sishen Iron Ore Company.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the period are expected to increase by between 12% and 28% year-on-year.

While Exxaro’s operations were declared an “essential service” during the lockdown period, and thus able to operate, the environment remained challenging, the company said on August 11.

“However, our own managed operations were resilient, resulting in higher commercial coal revenue supported by record coal export volumes, albeit at lower dollar prices, but benefiting from a weaker exchange rate during the period,” it said.

Operating costs were negatively impacted by some inflationary pressure, additional distribution costs related to higher export volumes and higher buy-in costs for coal, but partially offset by the positive impact of the higher discount rates used in rehabilitation provisions and foreign exchange gains.

After adjusting for noncore items for both financial years, core HEPS for the period are expected to increase by between 1% and 17% year-on-year.

After adjusting for noncore items for both financial periods, core Ebitda for the period is expected to increase by between 30% and 46% year-on-year.