Exxaro earnings fall below $600 million under South African executive Nombasa Tsengwa

Exxaro Resources, a diversified resource group based in South Africa led by CEO Nombasa Tsengwa, has disclosed a significant downturn in its 2023 fiscal year earnings, primarily attributed to a decline in revenue amidst challenging market conditions.

At the end of its 2023 fiscal year, Exxaro Resources reported a double-digit decline in its headline earnings, the primary profit measure in South Africa. According to the company’s recently published financial results, there was a 22-percent decrease in headline earnings, dropping from R14.56 billion ($766.68 million) in 2022 to R11.33 billion ($596.16 million) in 2023.

The decline in earnings was fueled by a notable decrease in revenue, which fell by 16.59 percent from R46.40 billion ($2.45 billion) in 2022 to R38.40 billion ($2.04 billion) in 2023. This decline was primarily driven by lower export prices and reduced domestic and export sales volumes during the fiscal year, amidst challenging market conditions.

What South African business executive Nombasa Tsengwa is saying

Commenting on the financial results, Tsengwa expressed confidence in the company’s ability to create value despite the challenges faced during the fiscal year. Tsengwa highlighted the company’s operational resilience and emphasized its commitment to its Sustainable Growth and Impact strategy, aimed at diversifying its business while maintaining strong financial fundamentals.

Tsengwa stated, “We remain committed to our sustainable growth and impact strategy as we transition towards becoming a more diversified business through a disciplined capital allocation framework. Our strength lies in the dedication of our employees who continuously contribute to the value of our business.”

Despite the decline in earnings, Exxaro’s board has recommended a dividend of R10.1 ($0.531) per share, totaling approximately R3.4 billion ($178.88 million), along with a special dividend of R5.72 ($0.301) per share, amounting to approximately R2 billion ($105.26 million). This recommendation aligns with the company’s strategic approach to capital allocation and its tradition of returning impressive returns to its stakeholders.

Nombasa Tsengwa’s leadership: Steering Exxaro through market turbulence

Exxaro is a South African-based diversified resources group with interests in coal, TiO2, ferrous metals, and energy. The company operates in South Africa, Europe, the Democratic Republic of the Congo, and the United States.

Tsengwa, who assumed the role of CEO in March 2021, is credited with leading the company through a period of rising global commodity prices and navigating unprecedented challenges, including the transition out of lockdowns and civil unrest in 2021.

Despite the fiscal challenges, Exxaro under the leadership of Nombasa Tsengwa remains focused on enhancing operational efficiencies and governance excellence while pursuing its strategic growth initiatives. The company’s resilience in the face of market uncertainties underscores its commitment to delivering long-term value to its shareholders.