Chief executive's message For the year ended 31 December 2024

The past financial year has been marked by unprecedented events globally and we have navigated this with resilience. Our values of committed to excellence, empowered to grow and contribute, honest responsibility and teamwork have ensured that we deliver on our commitments to stakeholders.

In the 2024 financial year, we prioritised health and safety, ensuring that all our employees returned to their families safely, every day. Through incredible safety leadership, effective communication, consequence management, training, and risk management, our goal of achieving Zero-Harm remains attainable.

We are proud to report that for the year ended 31 December 2024 (FY24), the group achieved 28 consecutive months without any work-related fatalities. Our lost-time injury frequency rate (LTIFR) of 0.06 achieved in FY24, trended in the right direction from 0.07 per two-hundred thousand man-hours worked for the financial year ended 31 December 2023 (FY23).

Furthermore. we concluded a three-year coal wage agreement with all trade unions, demonstrating the existence of strong relationships built on trust and mutual respect.

Our Sustainable Growth and Impact Strategy remains intact. Supported by our five strategic objectives of transitioning at speed and scale, making our minerals and energy businesses thrive, empowering people to create an impact, to become a catalyst for economic growth and environmental stewardship, and to be carbon neutral by 2050, Exxaro is well positioned to win and will continue to power better lives in Africa and beyond for decades to come.

Our diversification strategy, which supports Exxaro’s vision of resources powering a clean world, is gaining momentum. On 17 February 2025, Cennergi Holdings Proprietary Limited (Cennergi), a wholly owned subsidiary of Exxaro, in partnership with G7 Renewable Energies Proprietary Limited, reached financial close on the 140MW Karreebosch Wind Farm (RF) Proprietary Limited (Karreebosch) project. Karreebosch has secured a 20-year Power Purchase Agreement with Northam Platinum Limited. Cennergi acquired 80% of the share capital in Karreebosch as well as 50% of the share capital in Karreebosch Asset Management Proprietary Limited. The total project cost is estimated to be R4.7 billion which will in the majority be funded with project financing from Nedbank, Absa Bank, and Standard Bank with the financial structure set up to ensure long-term sustainability, as well as with limited recourse to the Exxaro balance sheet. This will add to Cennergi’s existing 297MW gross capacity, bringing total gross capacity to 437MW. With this, Cennergi is well on track to realise its ambition to be a leading energy solutions business, with managed capacity of 1.6 gigawatt (GW) by 2030.

We are pleased to announce that Eyesizwe shareholders have signed a separate waiver and undertaking, in favour of, and enforceable by Eyesizwe, to maintain the current 30.81% shareholding in Exxaro until 2027. In terms of the waivers and undertakings, shareholders waived their options to dispose of any of the locked-in shares or make any request which will result in Eyesizwe having to dispose of the locked-in shares, in the previously stated agreed tranches, until 2027. This is a significant milestone which ensures that Exxaro retains its empowerment level and status as one of South Africa’s largest and foremost black-empowered and diversified mining companies.

Our operations delivered a solid operational performance while navigating several external factors within the operating environment.

In line with our production guidance, overall coal production volumes, excluding buy-ins, reduced by 7% to 39.5Mt in FY24, from 42.3Mt in FY23. The decrease in production volumes was largely driven by lower Eskom demand at Grootegeluk mine. Belfast mine production improved by 21% to 3.5Mt in FY24 compared to 2.9Mt in FY23, after operating for the full year.

In line with guidance, overall coal sales volumes reduced by 3% to 39.4Mt in FY24 from 40.5Mt in FY23, mainly due to lower Eskom demand. Export sales increased by 37% to 7Mt from 5.1Mt in FY23, driven by the use of alternative distribution channels and Transnet Freight Rail (TFR) performance, which improved in the latter part of the year.

The benchmark API4 RBCT export price averaged US$105 per tonne in FY24, compared to US$121 per tonne in FY23, a decline of 13%. Despite the decline, Exxaro achieved a strong 95% price realisation in FY24 compared to 97% in FY23 owing to our effective market-to-resource optimisation initiatives.

Coal revenue increased by 6% to R39 115 million in FY24 compared to R36 945 million in FY23. The higher revenue was mainly due to higher export volumes and higher prices in the domestic market. However, we also experienced cost pressures driven by inflation, higher selling and distribution costs due to the use of alternate distribution channels, and increased operational and maintenance cost, primarily driven by higher volumes of overburden removal.

Cennergi’s operating wind assets generated 725 GWh of electricity in FY24 compared to 727GWh in FY23. Revenue increased by 5% to R1 411 million from R1 345 million in FY23. Wind generation was in line with the December 2024 guidance of 729GWh.

Group revenue increased by 5% to R40 725 million from R38 698 million in FY23.

Group EBITDA decreased by 22% to R10 423 million from R13 399 million in FY23. This was mainly attributable to the 16% decrease in Coal EBITDA and a negative contribution from the Other operating segment.

Adjusted equity-accounted income decreased by 47% to R3 685 million in FY24 compared to R6 991 million in FY23. This was mainly driven by SIOC’s adjusted equity-accounted income which reduced significantly due to lower iron ore prices and lower sales volumes.

As a result, headline earnings decreased by 36% to R7 298 million in FY24 from R11 327 million in FY23. This translates into headline earnings per share (HEPS) of 3 016 cents per share in FY24 compared to 4 681 cents per share in FY23.

Total capital expenditure decreased by 8% to R2 475 million from R2 699 million in FY23. The capex for FY24 comprised R2 146 million, mainly for coal sustaining capital, R302 million expansion capital for our Energy projects and R27 million intangible assets.

Given our cash generation, our net cash position was R16 309 million (excluding Energy’s net debt) at 31 December 2024, compared to R14 834 million at 31 December 2023. This represents a 10% positive change year-on-year.

The board of directors approved a gross final cash dividend of 866 cents per share, for the year ended 31 December 2024 and resolved to embark on a share repurchase programme of R1.2 billion, subject to prevailing market conditions.

Our quality assets, strong technical expertise, leadership depth and our people that are empowered to create impact to ensure that we continue to deliver shareholder returns and stakeholder value year-in and year-out.

Riaan Koppeschaar

Acting chief executive officer and Financial director