The board of directors (the board) is pleased to present the group and company annual financial statements of Exxaro Resources Limited for the year ended 31 December 2024 (group and company annual financial statements 2024).
Exxaro is a South African-based diversified resources group with an existing coal and energy business and acquisitive growth prospects in minerals and energy solutions. Exxaro is evolving into a sustainable and impactful business that promotes economic growth, environmental stewardship and positive change.
Exxaro's investments in associates include a 20.62% (2023: 20.62%) equity interest in SIOC, which extracts and processes iron ore, a 26% (2023: 26%) equity interest in Black Mountain, which produces zinc, lead, copper and silver in the Northern Cape; and a 10.26% (2023: 10.26%) effective equity interest in RBCT, which is an export terminal, as well as a 50% (2023: 50%) joint venture with Thungela in Mafube, which produces coal.
Exxaro is a public company incorporated in South Africa and is listed on the JSE with headquarters in Centurion, South Africa.
Exxaro has made significant progress in the process of disposing of the entire shareholding in Exxaro FerroAlloys Proprietary Limited, with the signing of a sale and purchase agreement expected to be concluded in 2025.
The integrated report and supplementary information contain material information on the activities and performance of the group and its various divisions. These reports are unaudited. The board acknowledges its responsibility to ensure the integrity of the integrated report and supplementary information. We have accordingly applied our minds to the integrated report and believe the report addresses all material issues, and fairly presents the integrated performance, impact and sustainability of the organisation.
Exxaro's board is the focal point and custodian of good corporate governance for the group. The board assumes ultimate accountability and responsibility for the group's performance and affairs. In so doing, it effectively represents and promotes the group's legitimate interests. As a responsible corporate citizen, Exxaro considers its material stakeholders' legitimate interests and expectations to ensure it contributes positively to society and the environment.
Exxaro's corporate governance is underpinned by principles that guide the board in meeting its responsibilities to the company, the group and its stakeholders. These principles enable Exxaro to achieve the King IVTM governance outcomes and fulfil its purpose to power better lives in Africa and beyond through its own ethical and effective leadership.
King IVTM promotes good governance, transparency in leadership and decision making, and a focus on sustainability. Sustainable development is an ethical and economic imperative. It entails economic and social growth to meet present needs without compromising future generations' ability to fulfil their needs. Sustainable development is a fitting response to organisations being an integral part of society, their status as corporate citizens and meeting stakeholders' needs, interests and expectations. Exxaro expresses its commitment to sustainable development through its Sustainable Growth and Impact strategy.
The board sets Exxaro's short, medium and long-term strategic direction through its Sustainable Growth and Impact strategy. It enables sustainable value creation through the approval of a capital allocation model and budget, setting and monitoring performance and culture expectations as well as a group governance framework. The board supports King IVTM strategy-setting principles through an iterative process, which includes an assessment of how sustainability and ESG objectives are integrated into the strategy.
Our integrated medium to long-term decarbonisation roadmap to achieve carbon neutrality by 2050 has been submitted for a peer review to ensure its credibility and subsequent implementation.
We continue to use a strategic performance monitoring dashboard to report on the achievement of prioritised KPIs that are aligned to the strategy, in line with our tiered governance approach.
Full details on how these principles have been applied in Exxaro are set out in the 2024 integrated and ESG reports.
In terms of the King IVTM guidance paper on Responsibilities of Governing Bodies in Responding to Climate Change while
accountability remains with the board, the responsibility for managing and monitoring risk and impact should be delegated
to management with defined indicators and targets to measure and assess performance. ESG governance at its essence
encapsulates the policies, practices and procedures adopted by the group to manage and enhance its ESG performance.
Exxaro works to integrate and embed ESG into the organisation, beyond mere compliance, through a tiered governance structure and lens through which to view the Sustainable Growth and Impact strategy.
More detail on our ESG governance is set out in the 2024 integrated and ESG reports.
The results for the years ended 31 December 2024 and 2023 were adjusted for the key items as noted in the reconciliation of headline earnings (refer note 5.3).
The accounting policies applied during the year ended 31 December 2024 are consistent, in all material respects, with those applied in the group and company annual financial statements for the year ended 31 December 2023.
The diagram above represents the order of our capital allocation framework. In applying our capital allocation framework, we aim for a gearing ratio of below 1.5 times net debt (excluding ring-fenced project financing) to EBITDA. The capital allocation framework is in line with our commitment to sustainably return cash to shareholders through the cycle while retaining a strong financial position.
During 2024, we received cash of R12.3 billion (2023: R16 billion), comprising R7.8 billion from our operations (net of tax paid) (2023: R10.7 billion), dividend income received from our equity-accounted investments of R3.9 billion (2023: R4.9 billion) as well as net interest received of R0.6 billion (2023: R0.4 billion).
In terms of our capital allocation framework, we utilised this cash, to mainly:
Pay dividends of R7.7 billion (2023: R7.4 billion).
The share capital of the company is summarised as follows:
| Number of shares | ||
| At 31 December | 2024 | 2023 |
| Authorised ordinary shares of R0.01 each | 500 000 000 | 500 000 000 |
|---|---|---|
| Issued ordinary shares of R0.01 each | 349 305 092 | 349 305 092 |
| Treasury shares held by Eyesizwe | 107 612 026 | 107 612 026 |
| Treasury shares held by Kumba Resources Management Share Trust | 158 218 | 158 218 |
An analysis of shareholders and the respective percentage shareholdings appears in chapter 19: annexure 1.
Our investments in subsidiaries are fully disclosed in note 17.6.
The dividend policy is to consider an interim and final dividend for each financial year. At its discretion, the board may consider a special distribution where appropriate. Depending on the perceived need to retain funds for expansion or operating purposes, the board may approve the declaration and payment of dividends.
Exxaro's dividend policy comprises the following two components:
Exxaro declared the following dividends relating to 2024:
Interim dividend number 43 of 796 cents per share was approved by the board on 13 August 2024 and declared in South African rand in respect of the six-month period ended 30 June 2024. The dividend payment date was Monday, 7 October 2024, to shareholders recorded on the register of the company at close of business on Friday, 4 October 2024.
Final dividend number 44 of 866 cents per share was approved on 11 March 2025 and declared in South African rand in respect of the year ended 31 December 2024. The final dividend payment date is Monday, 12 May 2025 to shareholders recorded on the register of the company at close of business on Friday, 9 May 2025 (record date). To comply with the requirements of Strate, the last date to trade cum dividend is Tuesday, 6 May 2025. The shares will commence trading ex-dividend on Wednesday, 7 May 2025.
The final dividend declared from income reserves, is subject to a dividend withholding tax of 20% for all shareholders who are not exempt from or do not qualify for a reduced rate of dividend withholding tax. The net local dividend payable to shareholders, subject to dividend withholding tax at a rate of 20%, amounts to 692.80000 cents per share.
The number of ordinary shares in issue at the date of this declaration is 349 305 092. Exxaro company's tax reference number is 9218/098/14/4.
On 11 March 2025, the board approved a share repurchase programme to the value of R1.2 billion, subject to prevailing market conditions, and JSE Listings Requirements.
The events after the reporting period are disclosed in note 18.3.
During 2024 the company welcomed Nosipho Molope as an independent non-executive director and audit committee member with effect from 3 January 2024.
At the date of compilation of this report, the following individuals were directors of the company:
| MG Qhena | Independent non-executive and chairman of the board |
| PA Koppeschaar | Finance director and executive director |
| GJ Fraser-Moleketi | Lead independent non-executive |
| KM Ireton | Independent non-executive |
| B Magara1 | Chief executive officer and executive director |
| IN Malevu | Non-executive |
| B Mawasha | Independent non-executive |
| N Medupe | Independent non-executive |
| Dr P Mnganga | Independent non-executive |
| VZ Mntambo | Non-executive |
| N Molope | Independent non-executive |
| MLB Msimang | Non-executive |
| CJ Nxumalo | Independent non-executive |
| PCCH Snyders | Independent non-executive |
1 Appointed as CEO on 1 April 2025 and will step down as independent non-executive on 31 March 2025.
Details of the directors in office at the date of this report are set out in the 2024 integrated and ESG reports.
Details of the directors' shareholdings are contained in note 14.5.3.
We had the following changes to our executive leadership:
| |
Designation | Date |
| MH Nana | Group company secretary | Appointed on 1 May 2024 |
| AT Ndoni | Chief strategic resilience and governance officer | Resigned on 30 November 2024 |
| Dr N Tsengwa | CEO and executive director | Resigned on 5 February 2025 |
| B Magara | CEO and executive director | Appointed on 1 April 2025 |
In accordance with paragraph 3.59(b) of the JSE Listings Requirements shareholders were informed on 6 February 2025 of Dr Nombasa Tsengwa's resignation. The board thanks Dr Nombasa Tsengwa for her years of service and wishes her all the best in her future endeavours.
The board appointed longstanding finance director, Riaan Koppeschaar, as acting CEO while continuing as finance director of Exxaro until 31 March 2025.
Further to the SENS announcement of 6 February 2025, and following an expedited and targeted selection process, the board of directors announced the appointment of Ben Magara as the incoming CEO, effective 1 April 2025. Ben will succeed acting CEO, Riaan Koppeschaar, who will continue in his role as finance director.
Ben is a qualified Mining Engineer and highly regarded mining veteran with over 35 year's industry experience in both soft and hard rock mining at underground and pit operations. He is renowned for driving operation excellence and providing strategic leadership at multiple large mining operations.
KPMG Inc., with designated audit partner Safeera Loonat, was re-elected as independent external auditor at the AGM held on 23 May 2024 in accordance with section 90 of the Companies Act in respect of the 2024 financial year.
The audit committee report appears here, as well as in the 2024 Integrated and ESG reports.
| Group | ||
| 2024 Rm |
2023 Rm |
|
| Amount approved | 67 484 | 65 309 |
| Total borrowings | (8 220) | (8 923) |
| Unutilised borrowing capacity | 59 264 | 56 386 |
The borrowing powers were set at 125% of shareholders' funds (equity attributable to owners of the parent) for both the 2024 and 2023 financial years.
Pursuant to the authorisation granted at the AGM held on 23 May 2024, shareholders approved, in accordance with section 45 of the Companies Act, the granting of financial assistance to related and inter-related companies of Exxaro.
The directors resolved that the company would satisfy the solvency and liquidity test, as contemplated in section 45 of the Companies Act and detailed in section 4 of the Companies Act, post such assistance. The terms under which such assistance will be provided are fair and reasonable to the company.
Details of the employee incentive schemes are set out in the remuneration committee and remuneration reports in the 2024 integrated and ESG reports and the supplementary information.
Details of related-party transactions are set out in note 15.1.
The directors believe that the group and company have adequate financial resources to continue in operation for the foreseeable future. Accordingly, the group and company annual financial statements 2024 have been prepared on a going-concern basis.
The directors are not aware of any new material changes, or any material non-compliance with statutory or regulatory requirements that may adversely impact the group or company.
The company registration number is 2000/011076/06. The registered office is The conneXXion, 263B West Avenue, Die Hoewes, Centurion.
Refer chapter 19: annexure 3 for further details.
Absa Bank Limited acted as lead equity sponsor and debt sponsor to the company for the financial year ended 31 December 2024.
Tamela Holdings Proprietary Limited acted as joint equity sponsor to the company for the financial year ended 31 December 2024.
JSE Investor Services Proprietary Limited serves as the South African registrar of the company.
The 24th (twenty fourth) AGM of shareholders of Exxaro will be held via electronic communication and in person meeting participation (subject to any adjournment or postponement, health and safety protocols) at The conneXXion, 263B West Avenue, Die Hoewes, Centurion, South Africa, in the Auditorium at 10h00 on Thursday, 15 May 2025 (2025 AGM) to consider and, if deemed fit, pass with or without modification, the resolutions presented thereat.
IR