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(Alliance News) - Thungela Resources Ltd on Friday posted a significant increase in interim earnings due to strong thermal coal prices in its first report as an independent company.
Thungela was formally spun off from Anglo American PLC in June when it listed on both the London and Johannesburg stock exchanges.
Shares in Thungela rose 5.3% to ZAR49.26 on Friday morning in Johannesburg, while its London shares were 6.2% higher at 241.96 pence.
For the six months to June 30, the coal miner said its revenue hiked to ZAR10.05 billion from ZAR1.66 billion a year before, leading to a profit of ZAR351 million, around GBP17.2 million, from a ZAR122 million loss.
Operating profit surged to ZAR1.89 billion from ZAR52 million, benefiting from a strong recovery in thermal coal prices, underpinned by the global economic recovery. Earnings per share was 313 rand cents, swinging from a loss of 193 cents in the same period a year prior.
The company expects to declare maiden dividend in its results for 2021 as a whole at 30% free cash flow.
Looking ahead, Thungela Resources said it was cash positive and well positioned after spin-off and expects positive adjusted operating free cash flow for rest of 2021.
The coal producer confirmed guidance of 15 million to 16 million tonnes of export saleable production for 2021. It expects capital expenditure to be at the low end of the ZAR2.60 billion to ZAR3.00 billion range.
"We are pleased to note the recent recovery of global thermal coal prices. These are reflective of the continued demand for high quality coal amid challenging supply dynamics across many regions," said Chief Executive July Ndlovu.
"The steps we have taken to upgrade our portfolio and our continued focus on improving productivity and operating costs, will no doubt stand us in good stead into the future," Ndlovu added.
Thungela produces thermal coal from seven collieries in Mpumalanga, namely Goedehoop, Greenside, Isibonelo, Khwezela, Zibulo, Mafube and Rietvlei.
It owns a 50% interest in Phola, which owns and operates the Phola coal processing plant in Mpumalanga, South Africa. Thungela also holds a 23% interest in the Richard Bay coal terminal, also in South Africa.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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