Exxaro interim dividend triples

Diversified energy group Exxaro grew its interim dividend for the six months to June more than threefold to 300c from 90c in 2016 due to a higher coal price and a good performance from its subsidiary Cennergi, it says.

Chief financial officer Riaan Koppeschaar said on Thursday a detailed announcement would be made in the current quarter on the reference share price for the new black economic empowerment shareholding structure that would replace the 10-year Main Street 333 structure, which matured in 2016.

In the six months to June, Exxaro grew revenue 10% to R10.7bn compared with the matching period in 2016, while headline earnings almost trebled to 903c a share from 307c.

Investec Securities said global coal miners were benefiting from a surge in Chinese demand for thermal coal as a crackdown on illegal mining and pollution had coincided with a heatwave and lower generation from its hydropower stations.

Exxaro is considering steps to improve its coal portfolio and is disposing of its stake in mineral sands producer Tronox.

It has also earmarked for sale its stakes in Black Mountain, Moranbah, Arnot and the North Block Complex.

Surplus cash realised from disposals, after debt servicing and spending on sustaining the operations, would be used for expansion, special distributions to shareholders or mergers and acquisitions, said Exxaro CEO Mxolisi Mgojo.