March 9, 2017 / 10:45 AM / 5 months ago

Exxaro's profits jump with rise in coal prices

2 Min Read

March 9 (Reuters) - South African miner Exxaro reported a rise in annual profits on Thursday, thanks to a surge in coal prices, saying it expected the market to continue to strengthen this year.

The company, which also has interests in iron ore, said headline earnings per share jumped to 1,302 South African cents last year from 457 cents in 2015.

On Wednesday the company announced it was selling its 44 percent stake in U.S. listed inorganic minerals and chemicals firm Tronox, worth nearly $900 million, leaving it to focus on its core mining business.

"Supportive market conditions are expected in 2017 for most of Exxaro's chosen coal market segments compared to 2016, both domestically and internationally," chief executive Mxolisi Mgojo said in a results presentation.

After half a decade of decline, thermal coal prices have risen by two thirds since the beginning of last year, driven by a sharp cut in Chinese production and strong demand.

Exxaro produces thermal, semi-soft coking and metallurgical coal for export and for domestic consumption with some of its mines tied to power stations owned by national power utility Eskom.

A gross final cash dividend of 410 cents was declared, up from the 85 cents per share paid out last year.

Shares in Exxaro were down 1.45 percent at 112,235 rand by 1032 GMT. ($1 = 13.2374 rand) (Reporting by Zandi Shabalala)

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