Thungela Resources Ltd said on Tuesday it expects interim earnings to plunge as the coal producer grappled with lower prices, rail constraints in South Africa, and weaker demand during winter in Europe and Asia.
The Rosebank-based thermal coal exporter guides for earnings per share of between R 7.00 and R 10.00 for the six months ending June 30, down sharply from R 22.45 a year earlier. Headline EPS is estimated at between R 7.00 and R 10.00, from R 22.46.
For the first half, Thungela projects export saleable production for its South African operations to be 6.2 million tonnes, which remains within the guidance range of 11.5 million tonnes to 12.5 million tonnes on an annualised basis.
Export saleable production at Ensham is expected to be 1.9 million tonnes. Thungela acquired the Ensham Mine in Australia in September last year.
Thungela said the Richards Bay benchmark coal price averaged $99.71 per tonne, down 18% $121.00 in the same period a year before. The Newcastle Benchmark coal price dropped by a quarter to $129.99 per tonne on average compared to $172.79 per tonne.
But Thungela said the war in Ukraine, coupled with tensions in the Middle East, had lent support to coal prices. Also, the lack of availability of high quality coal and the expected restocking in South East Asia following the monsoon season is expected to support the Richards Bay benchmark coal price.
The coal miner said free on board cost per export tonne, excluding royalties for the South African operations, is expected to be at the lower end of the guidance range of R 1,170 to R 1,290 per tonne.
Thungela said its diversification into Australia had proven successful.
It establishment of its Marketing International in Dubai is progressing well and expects it to fully transition the marketing activities for its South African coal from Anglo American Marketing Ltd on July 1. The marketing team has been successfully marketing Ensham coal since September.
Thungela expects to release its interim financial results on or about August 19.
Shares in Thungela lost 3.5% to 501.00 pence early Tuesday in London. They were down 3.6% to R 115.92 in Johannesburg.
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