He said the group has a broader energy transition investment narrative and that will allow it to investigate opportunities outside the traditional copper and manganese into other metals.
“It does not mean there is anything imminent in that commodity set, but it is keeping us busy on the due diligence front and engaging with principles. We are confident we will progress a deal in the next six months. It is my intention at this time,” said Lilleike.
Asked whether the deal would be in South Africa, Lilleike said the group is keeping an open mind of the geographies in which it is pursuing deals.
“I would like to do a deal in South Africa. I think we have the capabilities, the support of regulators to do deals in South Africa. The commodities we are looking at are not in this country, they are north of our borders in different commodities and different continents,” he said.
Exxaro's revenue remained R18.98bn in the six months to June, in line with a year ago. The group generated 23% less cash at R4.8bn from R6.2bn a year ago. The company said it is still within its 2024 market guidance and maintains its R12bn to R15bn cash book. The group declared a R7.96 a share interim dividend.
“Our half year results demonstrate our business performance continues to be resilient despite volatile markets locally and globally. Our market-to-resource optimisation strategy continues to add value to our portfolio and ultimately deliver consistent performance,” said Tsengwa.
However, Exxaro said lacklustre rail performance due to locomotive unavailability, cable theft, derailments and vandalism remained a challenge. Collaboration by the Transnet Freight Rail-Industry Recovery Team realised some benefits and service levels did not deteriorate further. Exxaro said it railed 2.45-million tonnes of export coal to Richards Bay Coal Terminal in the same period, in line with the same period last year.
The group said its alternative logistics channels yielded returns as export sales increased by 21.8% to 3.2-million tonnes during the first half of 2024.
However, coal production volumes declined by 12.7% from 22.1-million tonnes for the second half of 2023 to 19.3-million tonnes in the first half of 2024, mainly attributed to continuing low demand from Eskom and logistical challenges.
“Domestically, operational challenges and equipment failures at Matimba and Medupi power stations continued into the first half of 2024, impacting on Eskom’s offtake of power station coal in the Waterberg region. Market participants in the domestic market are pursuing options to manage their export pricing exposure and securing stable revenue streams in a logistically constrained environment,” said the group.
TimesLIVE
Exxaro foresees 'busy' deal pipeline
Image: Supplied
Exxaro Resources is “confident it will progress a deal” in the next six months and continues to evaluate opportunities to grow its clean metals portfolio, it said on Thursday as it released its interim results for the six months to June 30.
The company is exploring growth opportunities, CEO Nombasa Tsengwa told journalists at the release.
“There is a lot of work the team is doing on the M&A side, looking at aspects of assets for acquisition but not under pressure,” she said.
Exxaro is modifying its business to diversify towards cleaner minerals including manganese, copper and bauxite that are vital to a low-carbon future.
Chief growth officer Richard Lilleike said the coal producer's activity pipeline had doubled in the past six months.
“We are active in the commodities we identified already as there were a number of ongoing discussions,” he told journalists.
Exxaro tight-lipped over new projects
He said the group has a broader energy transition investment narrative and that will allow it to investigate opportunities outside the traditional copper and manganese into other metals.
“It does not mean there is anything imminent in that commodity set, but it is keeping us busy on the due diligence front and engaging with principles. We are confident we will progress a deal in the next six months. It is my intention at this time,” said Lilleike.
Asked whether the deal would be in South Africa, Lilleike said the group is keeping an open mind of the geographies in which it is pursuing deals.
“I would like to do a deal in South Africa. I think we have the capabilities, the support of regulators to do deals in South Africa. The commodities we are looking at are not in this country, they are north of our borders in different commodities and different continents,” he said.
Exxaro's revenue remained R18.98bn in the six months to June, in line with a year ago. The group generated 23% less cash at R4.8bn from R6.2bn a year ago. The company said it is still within its 2024 market guidance and maintains its R12bn to R15bn cash book. The group declared a R7.96 a share interim dividend.
“Our half year results demonstrate our business performance continues to be resilient despite volatile markets locally and globally. Our market-to-resource optimisation strategy continues to add value to our portfolio and ultimately deliver consistent performance,” said Tsengwa.
However, Exxaro said lacklustre rail performance due to locomotive unavailability, cable theft, derailments and vandalism remained a challenge. Collaboration by the Transnet Freight Rail-Industry Recovery Team realised some benefits and service levels did not deteriorate further. Exxaro said it railed 2.45-million tonnes of export coal to Richards Bay Coal Terminal in the same period, in line with the same period last year.
The group said its alternative logistics channels yielded returns as export sales increased by 21.8% to 3.2-million tonnes during the first half of 2024.
However, coal production volumes declined by 12.7% from 22.1-million tonnes for the second half of 2023 to 19.3-million tonnes in the first half of 2024, mainly attributed to continuing low demand from Eskom and logistical challenges.
“Domestically, operational challenges and equipment failures at Matimba and Medupi power stations continued into the first half of 2024, impacting on Eskom’s offtake of power station coal in the Waterberg region. Market participants in the domestic market are pursuing options to manage their export pricing exposure and securing stable revenue streams in a logistically constrained environment,” said the group.
TimesLIVE
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