Thungela Resources has reported a significant decline in its first-half earnings, mainly due to weaker coal prices and higher costs. The South African export coal producer, with operations in South Africa and Australia, saw its net profit plummet by 79% to R248 million. Despite the poor results, the company announced an interim dividend of R2 per share and plans for further share buybacks, supported by a strong cash position of R6.3 billion.
Revenue dropped 12% to R14.8 billion, affected by softer export coal prices and a weaker rand against the dollar. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell sharply by 68%, and headline earnings per share declined by 80% to 192 cents. The Australian operations faced additional pressure, with increased costs and reduced output due to tough mining conditions and bad weather.
Thungela has already bought back R328 million worth of shares this year and plans to buy back more, depending on market conditions. The company’s outgoing CEO, July Ndlovu, acknowledged the challenging global environment, marked by geopolitical tensions and tariff disputes that have disrupted supply chains and weakened coal demand.
Despite the difficult market conditions, Thungela remains committed to its strategy. The company’s share price fell slightly after the results, trading at R89.27. As Ndlovu prepares to hand over leadership to Moses Madondo, he expressed pride in the sustainable business built across multiple regions and confidence in the future under new management.
These results mark the end of Ndlovu’s tenure as CEO, but he remains optimistic about the company’s resilience and ongoing efforts to navigate the market uncertainties. Thungela’s focus on disciplined capital allocation and maintaining a healthy cash flow helps it withstand current challenges, even as profits decline.