Exxaro Profits Dip Below $600M Led by South African Exec. Nombasa Tsengwa

Exxaro Resources, a diversified resource firm based in South Africa led by CEO Nombasa Tsengwa, has announced a significant drop in its fiscal year 2023 earnings, principally due to a reduction in revenue amid adverse market conditions.

Exxaro Resources’ headline earnings, the major profit indicator in South Africa, fell by double digits at the conclusion of the fiscal year 2023. The company’s recently reported financial figures show a 22% decline in headline earnings, from R14.56 billion ($766.68 million) in 2022 to R11.33 billion ($596.16 million) in 2023.

The earnings decline was driven by a significant decrease in revenue, which decreased by 16.59 percent from R46.40 billion ($2.45 billion) in 2022 to R38.40 billion ($2.04 billion) in 2023. This drop was principally caused by lower export prices and lower domestic and export sales volumes during the fiscal year, notwithstanding difficult market conditions.

Commenting on the financial results, Tsengwa expressed confidence in the company’s potential to produce value despite the hurdles encountered throughout the fiscal year. Tsengwa underscored the company’s operational resiliency and its dedication to the Sustainable Growth and Impact plan, which aims to diversify its operations while preserving strong financial fundamentals.

Tsengwa remarked, “We are committed to our long-term development and impact strategy as we move to a more diverse business through a disciplined capital allocation framework. Our strength is our employees’ dedication, which continues to add value to our firm.”

Despite the drop in earnings, Exxaro’s board has recommended a dividend of R10.1 ($0.531) per share, totaling nearly R3.4 billion ($178.88 million), as well as a special payment of R5.72 ($0.301) per share, amounting to approximately R2 billion ($105.26 million). This advice is consistent with the company’s strategic capital allocation approach and its history of providing exceptional returns to its stakeholders.

Exxaro is a South African diversified resource company that invests in coal, TiO2, ferrous metals, and energy. The corporation is active in South Africa, Europe, the Democratic Republic of the Congo, and the United States.

Tsengwa, who became CEO in March 2021, is recognized with guiding the company during a period of growing global commodity prices and extraordinary problems, such as the end of lockdowns and civil upheaval in 2021.

Despite the budgetary problems, Exxaro, led by Nombasa Tsengwa, remains focused on improving operational efficiencies and governance excellence while pursuing strategic expansion plans. The company’s resiliency in the face of market uncertainty demonstrates its dedication to providing long-term value to its shareholders.

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