Thungela Resources Ltd on Monday hacked its interim dividend after its profit more than halved on the back of lower coal prices, logistical constraints in South Africa, and sluggish demand in Europe.
The Rosebank-based thermal coal exporter suffered 59% drop in pretax profit to R 1.77 billion from R 4.29 million a year earlier. Profit plunged 61% to R 1.19 billion, compared to R 3.01 billion.
For the first half, revenue rose 17% to R 16.75 billion, from R 14.36 billion. Adjusted earnings before interest, taxes, depreciation and amortisation slumped 52% to R 2.1 billion from R 4.4 billion.
South African export saleable production was up 1.6% to 6.2 million tonnes from 6.1 million tonnes. In Australia, export saleable output was 1.6 million tonnes. Thungela Resources in August 2023 completed its acquisition of the Australian-based Ensham coal mine.
Thungela said its first-half operational performance was in line with 2024 guidance in South Africa and ahead of full-year guidance in Australia.
Coal prices were lower. Richards Bay Benchmark coal price fell 22% on average to $101.05 per tonne for the first half of 2024 from $129.50 per tonne a year before. On average, Newcastle Benchmark coal price slumped 36% to $130.66 per tonne from $204.27.
The continued underperformance by Transnet Freight Rail also hurt Thungela’s results in first half and the milder winter conditions in the northern hemisphere led to reduced demand for coal.
Thungela cut its interim dividend to 200.00 rand cents, down 80% from 1,000 cents. It plans share buyback of up to R 160 million to be completed by December 31.
Earnings per share tumbled to 952 cents, down 58% from 2,245 cents, while headline EPS plummeted by the same percentage margin to 952 cents from 2,246 cents.
Thungela Marketing International, which was established in the United Arab Emirates, is now fully operational and is responsible for the marketing of the group’s South African and Australian coal, Thungela said.
Shares in Thungela rose 3.3% to 555.50 pence early Monday in London. They were up 3.2% to R 128.99 in Johannesburg.
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