Chapter 6Operational performance and working capital

6.1Operational performance

6.1.1 Accounting policies relating to operational performance

6.1.1.1 Revenue

For group, revenue is derived from contracts with customers for the supply of goods and rendering of services.

For company, as an investment holding and services company, revenue is derived from dividend income and interest income received from subsidiaries, associates and JVs (investment holdings), as well as from its revenue from contracts with customers for the rendering of services. In applying IAS 1 Presentation of financial statements, management concluded that the ordinary activities of the company do not include income from financial assets that do not relate to subsidiaries, associates and JVs, which are the company's primary investment holding activities. Instead, any income earned on other financial assets is considered incidental in nature.

Revenue from contracts with customers

Timing of recognition

Revenue is recognised when (or as) a performance obligation is satisfied by transferring a promised good or service to a customer. A promised good or service is transferred when (or as) the customer obtains control of that promised good or service.

Measurement on recognition

The amount of revenue recognised is the amount of the transaction price that is allocated to a satisfied performance obligation. The amount is determined on a gross basis when acting as a principal, or on a net basis when acting as an agent.

The total transaction price in a customer contract is allocated to the performance obligations identified in the contract based on their standalone selling prices. The standalone selling prices are determined based on listed prices at which those goods or services are sold in separate transactions. The customer contracts generally contain only one performance obligation and therefore the contract consideration generally reflects the standalone selling price of the performance obligation.

As a permitted practical expedient, no adjustment is made to the transaction price for the effects of the time value of money as the period of time between the delivery of goods or rendering of services and contract payment terms generally do not exceed 60 days, which is considered not to result in a significant financing component.

Nature of goods and services

Below is a summary of the different types of revenue depicting the standard terms and performance obligations for each type:

Revenue type	Performance obligation	Timing of when performance obligation is satisfied	Payment terms
Coal (domestic supply)	Delivery of coal at a contractually agreed-upon delivery point	On delivery (point in time)	Range: 0 to 60 days
Coal (FOB export supply)	Delivery of coal at a contractually agreed-upon delivery point	On delivery (point in time)	Range: 15 to 60 days
Renewable energy (electricity sales)	Delivery of electricity over time at a contractually agreed-upon metering point (output method)	As consumed and measured at the metering point (over time)	Within 60 days
Ferrosilicon	Delivery of ferrosilicon at a contractually agreed- upon delivery point	On delivery (point in time)	Range: 15 to 60 days
Biological goods	Delivery of biological goods at a contractually agreed-upon delivery point	On delivery (point in time)	Range: 15 to 60 days
Stock yard management services	Rendering of stock yard management services over time	As services are performed (over time)	Within 30 days
Project engineering services	Rendering of project engineering services over time	As services are performed (over time)	Within 30 days
Other mine management services	Rendering of other mine management services over time	As services are performed (over time)	Within 30 days
Transportation services	Rendering of freight or other transportation services over time (Including CFR basis for exports, if any, and special transportation arrangements for customers)	As services are performed (over time)	Range: 0 to 60 days
Corporate management services (company)	Rendering of corporate services over time	As services are performed (over time)	Within 30 days
Other services	Mainly rendering of storage services over time	As services are performed (over time)	Within 30 days

Dividend revenue

For company, dividend revenue from subsidiaries, associates and JVs is recognised when the right to receive payment is established.

Interest revenue

For company, interest revenue from subsidiaries is recognised as it accrues in profit or loss, using the effective interest rate method.

6.1.2 Revenue

Revenue is derived from contracts with customers. Revenue has been disaggregated based on timing of revenue recognition, major type of goods and services, major geographic area and major customer industries.

	Group
	Coal					Ferrous	Other
	Commercial
For the year ended 31 December 2024	Waterberg Rm	Mpumalanga Rm	Tied Rm	Other Rm	Energy Rm	Alloys Rm	Other Rm	Total Rm
Segmental revenue reconciliation
Segmental revenue¹	22 563	9 893	6 659		1 411	190	9	40 725
Local sales allocated to selling entity²		(172)	172
Export sales allocated to selling entity³	(4 427)	(8 427)		12 854
Total revenue	18 136	1 294	6 831	12 854	1 411	190	9	40 725
By timing and major type of goods and services
Revenue recognised at a point in time	18 136	1 294	5 716	12 854		187	7	38 194
Coal	18 136	1 294	5 716	12 854				38 000
Ferrosilicon						187		187
Biological goods							7	7
Revenue recognised over time			1 115		1 411	3	2	2 531
Renewable energy					1 411			1 411
Stock yard management services			243					243
Project engineering services			872					872
Transportation services						1		1
Other services						2	2	4

Total revenue	18 136	1 294	6 831	12 854	1 411	190	9	40 725
By major geographic area of customer⁴
Domestic	18 136	1 294	6 831		1 411	190	9	27 871
Export				12 854				12 854
Europe⁵				4 743				4 743
Asia⁶				7 156				7 156
Other				955				955

Total revenue	18 136	1 294	6 831	12 854	1 411	190	9	40 725
By major customer industries
Public utilities	15 842		6 831	262	1 411			24 346
Merchants	267	675		11 936				12 878
Steel	1 153	149						1 302
Mining	132	240				133		505
Manufacturing	224					55		279
Food and beverage	175						1	176
Cement	258	101		354				713
Chemicals		109						109
Other	85	20		302		2	8	417
Total revenue	18 136	1 294	6 831	12 854	1 411	190	9	40 725

¹	Coal segmental revenue is based on the origin of coal production.
²	Relates to product sold to tied mine customer.
³	Relates to product sold by export distribution entity.
⁴	Determined based on the customer supplied by Exxaro.
⁵	Relates mainly to Switzerland.
⁶	Relates mainly to Singapore.

	Group
	Coal					Ferrous	Other
	Commercial
For the year ended 31 December 2023	Waterberg Rm	Mpumalanga Rm	Tied Rm	Other Rm	Energy Rm	Alloys Rm	Other Rm	Total Rm
Segmental revenue reconciliation
Segmental revenue¹	22 496	8 666	5 783		1 345	398	10	38 698
Export sales allocated to selling entity²	(4 538)	(6 539)		11 077
Total revenue	17 958	2 127	5 783	11 077	1 345	398	10	38 698
By timing and major type of goods and services
Revenue recognised at a point in time	17 958	2 127	4 729	11 077		392	9	36 292
Coal	17 958	2 127	4 729	11 077				35 891
Ferrosilicon						392		392
Biological goods							9	9
Revenue recognised over time			1 054		1 345	6	1	2 406
Renewable energy					1 345			1 345
Stock yard management services			159					159
Project engineering services			895					895
Transportation services						2		2
Other services						4	1	5

Total revenue	17 958	2 127	5 783	11 077	1 345	398	10	38 698
By major geographic area of customer³
Domestic	17 958	2 127	5 783		1 345	398	8	27 619
Export				11 077			2	11 079
Europe⁴				5 522			1	5 523
Asia⁵				4 600			1	4 601
Other				955				955

Total revenue	17 958	2 127	5 783	11 077	1 345	398	10	38 698
By major customer industries
Public utilities	14 963		5 783	511	1 345			22 602
Merchants	370	1 230		9 826		2		11 428
Steel	1 462	152						1 614
Mining	250	23				351		624
Manufacturing	357					45		402
Food and beverage	233						2	235
Cement	262	70		314				646
Chemicals		646						646
Other	61	6		426			8	501
Total revenue	17 958	2 127	5 783	11 077	1 345	398	10	38 698

¹	Coal segmental revenue is based on the origin of coal production.
²	Relates to product sold by export distribution entity.
³	Determined based on the customer supplied by Exxaro.
⁴	Relates mainly to Switzerland and Germany.
⁵	Relates mainly to Singapore and Japan.

The group derives revenue from an external customer which accounts for at least 10% or more of the group's revenues, being 59% or R24 085 million (2023: 57% or R22 092 million).

The company derives the following revenue from its ordinary activities as an investment holding company and services company:

		Company
For the year ended 31 December	Note		2024 Rm	2023 Rm
Revenue from contracts with customers			1 634	1 543
Rendering of services over time: Corporate management services rendered to subsidiaries	17.3.1		1 634	1 543
Dividend revenue			8 861	8 153
Associates¹			3 741	3 386
Subsidiaries	17.3.1		5 120	4 767
Interest revenue			386	463
Subsidiaries	17.3.1		386	463
– Interest-bearing back-to-back loans receivable			377	443
– Interest-bearing acquisition loans receivable			1	4
– Interest-bearing treasury facilities receivable			8	16


Total revenue			10 881	10 159

¹	Dividends received from SIOC.

6.1.3 Operating expenses

		Group		Company
For the year ended 31 December	Note	2024 Rm	2023 Rm	2024 Rm	2023 Rm
Cost by nature
Operational expense items
Raw materials and consumables		5 672	5 332	19	11
Depreciation and amortisation		2 773	2 715	97	199
Write-down of inventories to net realisable value		141
Movements in inventories		(160)	140		7
Staff costs		6 980	6 091	905	804
Other employee-related costs		305	239	100	70
Contract mining		2 008	1 494
Repairs and maintenance		3 357	2 969	13	16
Railage and transport		4 719	3 178	3	1
Insurance		179	(138)	4	3
Exploration expenditure		12	8
Royalties		1 077	1 142
Water		93	79
Energy		1 113	1 027	8	11
Information management costs		682	690	160	147
Legal and professional fees		398	487	168	97
Movement in provisions	13.3	211	70	(3)	(1)
Movement in retirement employee obligations	14.4	13	11
Travel and subsistence		139	94	31	23
Security and office cleaning services		138	111	3	4
Licenses		7	6
Stock yard management services		243	159
Project engineering services		872	895

Financial gains and losses
Currency exchange differences		(97)	(124)	(3)	(5)
ECL's on financial assets at amortised cost		153	21	141	328
Write-off of trade and other receivables	6.2.3.1	13	4
Write-off of ESD loans		5	2	5	2
Fair value gains recognised on financial instruments at FVPL		(602)	(588)	(4)	(3)
Hedge ineffectiveness on interest rate swap cash flow hedges		12	18

General items and expenses
Write-off of other current assets			32		5
Net losses on disposal of property, plant and equipment		27	57		36
Losses on disposal of intangible assets		16		16
Movement in indemnification asset			5
Expenses relating to short-term leases		451	567	2	1
Expenses relating to variable leases		254	75
Operating lease income		(36)	(36)	(8)	(7)
(Gain)/loss on termination or modification of lease	11.3	(2)			2
Research and development costs		2	2
Own work capitalised¹		(268)	(434)
General charges		2 218	1 671	235	144
Total operating expenses		33 118	28 071	1 892	1 895

¹	Relates to operating expenses incurred that are capitalised to projects where qualifying criteria are met.

The following operating expense items have been further disaggregated:

		Group		Company
For the year ended 31 December	Note	2024 Rm	2023 Rm	2024 Rm	2023 Rm
Staff costs		6 980	6 091	905	804
– Salaries and wages		6 160	5 312	748	629
– Share-based payment expense		208	212	108	129
– Termination benefits		23	23	4	4
– Pension and medical costs		589	544	45	42
Consultancy fees¹		242	284	103	64
Auditor's remuneration¹		33	33	18	14
– Audit fees		31	30	16	11
– Other services		2	3	2	3
Depreciation and amortisation		2 773	2 715	97	199
– Depreciation of property, plant and equipment	10.1.3	2 512	2 483	6	137
– Depreciation of right-of-use assets	11.3	58	57	52	52
– Amortisation of intangible assets	10.2.3	203	175	39	10
Fair value gains recognised on financial instruments at FVPL		(602)	(588)	(4)	(3)
– Derivative financial instruments		(257)	(278)
– Debt investments: environmental rehabilitation funds		(222)	(216)	(4)	(3)
– Debt investments: portfolio investments		(11)	(4)
– Debt investments: deposit facilities		(112)	(90)
Currency exchange differences		(97)	(124)	(3)	(5)
– Net realised gains		(13)	(78)	(6)	(21)
– Net unrealised (gains)/losses		(84)	(46)	3	16

¹	Disclosed as part of legal and professional fees.

		Group			Company
For the year ended 31 December	Note		2024 Rm	2023 Rm		2024 Rm	2023 Rm
ECLs on financial assets at amortised cost (impairment losses/(reversal of impairment losses)):			153	21		141	328
Non-current
Other financial assets at amortised cost	10.3.3			(3)
– Performing				(3)
ESD Loans	10.3.3		13	44		13	44
– Performing			(1)			(1)
– Non-performing			14	44		14	44
Lease receivables			(1)
– Performing			(1)
Vendor finance loan	10.3.3		1			1
– Under-performing			1			1
Current
Trade and other receivables	6.2.3.1		96	(45)		3	(1)
Trade receivables			95	(5)
– Performing			(8)	(6)
– Non-performing			103	1
Other receivables			1	(40)		2
– Non-performing			1	(40)		2

Indebtedness by subsidiaries	6.2.3.1					1	(1)
– Performing						1	(1)

Non-interest bearing loans to subsidiaries	10.3.3					(1)	(5)
– Performing						(1)	(9)
– Non-performing							4
Other financial assets at amortised cost	10.3.3		(2)	(2)			(2)
– Performing			(2)	(2)			(2)
ESD loans	10.3.3		46	28		46	28
– Performing				(1)			(1)
– Non-performing			46	29		46	29
Vendor finance loan	10.3.3			(1)			(1)
– Performing			(1)	(1)		(1)	(1)
– Under-performing			1			1
Treasury facilities with subsidiaries	10.3.3					79	265
– Performing							(2)
– Non-performing						79	267