Coal producer Thungela takes a knock from lower prices
Thungela reported a net profit of R248m in the six months ended June 2025 from R1.18bn a year earlier as average coal prices fell by 11% and 10% in South Africa and Australia also declined by 11% and 10% respectively.
The group said its revenue fell by 12% year-on-year to R14.8bn and it realised an adjusted earnings before interest, taxation depreciation and amortisation of R691m.
'The global operating environment was characterised by increasing geopolitical uncertainties and tariff escalation disrupting global supply chains. These uncertainties resulted in weak demand in key coal demand regions resulting in softer prices, last seen during the Covid-19 pandemic,' said CEO July Ndlovu.
Despite the weaker financial performance, the group said its South Africa, export saleable production for the half year was 8Mt, including 6.4Mt from its local operations, as productivity was bumped up at the Zibulo and Mafube operations, while high rainfall hit production at the Khwezela mine.
Thungela said geology challenges affected Ensham in Australia which recorded 1.6Mt in export saleable production compared with 1.9Mt a year ago. 'We have more or less navigated through those and expect improvements in the second half of the year,' said Ndlovu.
The South African coal industry continues to benefit from the improved rail performance. 'In the first half of the year, Transnet Freight Rail achieved an annualised run rate of 54.3Mt, compared with 51.9Mt for 2024. The improved rail performance stems from industry collaborative initiatives and further optimisation projects, such as the signalling project, which are expected to improve rail performance.'
Ndlovu said Thungela returned R421m to shareholders, comprising an interim ordinary cash dividend of R2 a share and a share buyback of up to R140m, subject to favourable market conditions. 'This represents a return of 87% of adjusted operating free cash flow for the first half of 2025, significantly higher than the 30% minimum per the dividend policy, underscoring our commitment to shareholder returns through the cycle.'
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