Shares in Exxaro Resources surged after the announcement of higher first-half profit, signalling renewed investor confidence as the company steadies itself under new leadership.
The group reported an 11% increase in profit for the six months to end-June to R4.1bn, driven by stronger export and domestic sales, while headline earnings per share (HEPS) were up 13% to 1,724c.
Revenue rose 8% year on year to R20.6bn, driven mainly by the coal business, where improved volumes and higher price realisations helped cushion weaker commodity prices, the company said on Thursday.
Earnings before interest, tax, depreciation and amortisation (ebitda) rose 10% to R5.6bn, with the margin unchanged at 27%. Headline earnings were supported by stronger ebitda and an 18% rise in adjusted equity-accounted income, driven mainly by Black Mountain Mining’s higher production and sales.
Income from Sishen Iron Ore Company remained steady.
Speaking to Business Day, Ben Magara, who took over as CEO in April after a leadership upheaval that led to Nombasa Tsengwa’s resignation, outlined his immediate priorities and strategic direction.
Magara has framed his leadership around what he calls a triad of priorities: people, performance and growth. “People make the difference, culture is critical. We want a culture of openness and transparency.”
Within his first week at the helm, he visited all Exxaro’s operations to “reassure employees that leadership was visible and engaged”.
On performance, Magara was direct: “We are here to make money. We are here to produce. We have a role to play in society and in the SA economy.”
He pointed to cost-cutting measures and operational gains that beat analyst expectations, sending Exxaro’s share price higher. After rising as much as 12% in intraday trade, Exxaro ended the day gaining the most in 15 months, up 7.87% to R178.01.
The board approved an interim dividend of R8.43 per share, representing the company’s 45th consecutive dividend since listing on the JSE in 2006.
Exxaro’s production held steady at 19.4-million tonnes in the period, while sales rose 1% on stronger domestic and export demand, partly offset by lower volumes to Eskom.
The company said rail disruptions at Grootegeluk caused by heavy rains were mitigated by diverting product from Mpumalanga to meet customer commitments.
In its efforts towards lower-emission energy, Exxaro signed a memorandum of understanding with Eskom in April to reduce scope 2 and 3 emissions. The company also reached financial close on the Karreebosch renewable energy project, and said Cennergi’s wind assets generated 337GwH during the period, in line with guidance.
In manganese, Exxaro entered binding agreements in May to acquire stakes in several assets, including the Tshipi Borwa Mine. The transaction, valued at up to R14.68bn and awaiting approvals, is expected to close in the first quarter of 2026.
On growth, Magara said Exxaro is positioning itself across multiple commodities including manganese, copper and renewables, while coal remains its core business. He said the company is exploring life extensions at its coal operations, as its infrastructure and equipment outlast current reserves.
Magara said the next commodity target is copper, but only early-stage projects with geological confidence are being considered, as producing mines is too expensive.
While Exxaro remains open to copper, Magara said there are no plans to enter bauxite, citing the complexities of vertical integration. Bauxite is the primary ore used to produce aluminium.
“For now, the immediate focus remains on finalising the manganese transaction and optimising that business with joint venture partners.”
Update: August 21 2025
This story has new information.
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