Thungela Resources results reflect continued pressure on coal prices
Thungela’s highlights of Interim results for the six months ended 30 June 2025, show strong balance sheets while navigating challenging operating conditions:
- Operating a fatality-free business for two and a half years
- Export saleable production in South Africa increased year-on-year to 6.4Mt and Ensham achieved production of 1.6Mt (on a 100% basis)
- Adjusted operating free cash flow of R484 million for the period and net cash of R6.3 billion at 30 June 2025, after capital expenditure of R1.2 billion
- Declaration of an ordinary interim cash dividend of R2 per share and a share buyback of up to R140 million
- Shareholder returns of 87% of adjusted operating free cash flow* underscores its commitment to returns through the cycle
- The Group remains on track to achieve full year guidance
July Ndlovu, Chief Executive Officer said: “We are proud to report that we have operated for two and a half years without a loss of life. This bears testament to our unwavering commitment to safety as our first value. We remain unconditional about protecting the lives of our people.
The global operating environment was characterised by increasing geopolitical uncertainties and tariff escalations 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. The financial results for the six months ended 30 June 2025 however, demonstrate the strength of Thungela’s balance sheet, which has enabled the business to navigate the challenging market and operating environments while maintaining a disciplined capital allocation approach.
Thungela maintained its focus on controlling the controllables through increased production in South Africa, notwithstanding the impact of abnormally high rainfall at some of its opencast operations. In addition, our proactive approach in shielding the business from currency volatility has contributed R1.4 billion to our earnings.
The financial results reflect the continued pressure on coal prices, with the average realised export prices in South Africa and Australia declining by 11% and 10% respectively. The softer coal prices, combined with a weaker US dollar to South African rand exchange rate, have led to a decrease in Group revenue in the first half of the year.
Group revenue decreased by 12% year-on-year to R14.8 billion, realising an adjusted EBITDA of R691 million and net profit of R248 million. The Group generated adjusted operating free cash flow of R484 million for the first half of the year, which was positively impacted by a working capital unwind of R690 million and cash inflows of R453 million generated from its continued focus on managing foreign currency risk, resulting in net cash of R6.3 billion at 30 June 2025.
The Group recorded export saleable production of 8.0Mt (on a 100% basis) for the first half of the year. In South Africa, export saleable production increased by approximately 300kt to 6.4Mt, mainly due to productivity gains at Zibulo and Mafube, while production at Khwezela was impacted by abnormally high rainfall in the period.
Free on board (FOB) cost per export tonne excluding royalties of R1,258 was in line with the guidance range. Thungela’s full year guidance for export saleable production of 12.8Mt to 13.6Mt remains appropriate as production is seasonally weighted towards the second half of the year. Consequently, guidance for FOB cost per export tonne excluding royalties of R1,210 to R1,290 also remains appropriate.
