(Reuters) – South African coal miner Exxaro expects its half-year profit to fall by as much as 37%, mainly due to weaker prices of the fossil fuel and the impact of rail logistics problems, the company said on Friday.
Exxaro said it expected headline earnings per share (HEPS) – South Africa’s most common profit measure – of between 21.58 rand and 26.38 rand ($1.14-$1.39) for the six months ended June 30, down from 34.26 rand during the same period last year.
Thermal coal prices have retreated from 2022 peaks, when surging demand from Europe fired up coal miners’ earnings after a ban was imposed on Russian coal over Moscow’s invasion of Ukraine.
Prices have come off because European utilities have significant coal and gas stocks after a milder than expected winter, and have been ramping up renewable energy projects.
Coal companies are seeing sharp declines in profit as a result of lower demand.
South African coal miners have also been struggling to haul minerals to port due to limited freight rail capacity as state-owned logistics firm Transnet struggles with locomotive shortages, cable theft and vandalism of its infrastructure.
Exxaro’s export sales were 6% lower during the first half of this year, compared to the same period of 2022, due to rail challenges.
The company will release its financial results on Aug. 17
($1 = 18.9177 rand)
(Reporting by Nelson Banya; Editing by Mark Potter)