Thungela Resources Ltd reported on Monday its profit in 2023 nosedived as it battled against depressed coal prices and persistent rail constraints in South Africa.

The Rosebank-based coal miner said its pretax profit tumbled 70% to R 7.20 billion, about £301.1 million, in 2023 from R 24.14 billion in 2022, while net profit dived 73% to R 4.97 billion from R 18.21 billion.

Annual operating costs rose 5.9% to R 23.74 billion from R 22.42 billion.

Against the backdrop of significant decline in coal prices and continued poor performance from Transnet Freight Rail, revenue slumped 40% to R 30.63 billion from R 50.75 billion.

Export saleable production in South Africa declined 6.9% to 12.2 million tonnes from 13.1 million tonnes. In Australia, export saleable output was 900,000 tonnes. Thungela acquired the Ensham Mine in Australia last year.

The Richards Bay Benchmark coal price dropped 13% on average to $112.49 per tonne in the second half of the year, compared to $129.50 per tonne in the first half of the year.

In January 2023, Newcastle Benchmark coal price peaked at $357.75 per tonne, and the first half of the year averaged $204.27 per tonne, compared to $141.31 per tonne in the second half of the year.

Thungela slashed its final dividend to R 10.00 from R 40, with the total payout plunging to R 20.00 from R 100.00.

The cola miner said it will start share buyback programme of up to R 500 million. It expects this repurchase plan to to start from Tuesday and to June 3.

For 2023, earnings per share plummeted to R 37.66 from R 127.08, while headline EPS slumped to R 34.97 from R 130.82.

For 2024, Thungela guides for export saleable production of between 11.5 million tonnes and 12.5 million tonnes, based on the expected rail performance.

‘We continue to make good progress on our production replacement and life extension projects in South Africa, Elders and Zibulo North Shaft,’ Thungela said.

But its shares rose 7.8% to 478.40 pence early Monday in London. They were up 3.5% to R 111.68 in Johannesburg.

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