(Alliance News) - Thungela Resources Ltd said on Monday profit rose multifold as record high coal prices helped offset rail constraints in South Africa.
Thungela was spun off from Anglo American PLC in June last year and was then listed on both the London and Johannesburg stock exchanges in the same month.
For six months to June 30, pretax profit for the Rosebank-based coal miner multiplied to ZAR11.76 billion from ZAR260.0 million in the prior year.
"Very strong" coal prices led to a record half-year profit, notwithstanding significantly higher mining royalty charges and losses on derivative instruments, it said.
Benchmark coal prices reached an all-time high, averaging USD277 a tonne in the first half from USD97.71 per tonne around the same time last year.
Russia's war in Ukraine has sparked a global energy security crisis, exacerbated by supply constraints in several thermal coal producing regions.
Revenue soared to ZAR26.18 billion from ZAR10.05 billion, lifting adjusted earnings before interest, taxes, depreciation and amortisation to ZAR16.7 billion from ZAR1.9 billion.
Thungela declared an interim dividend of ZAR60 per share, making up 92% of adjusted operating free cash flow.
Earnings per share were strong at ZAR67.23 compared to ZAR3.13, while headline earnings per share leapt to ZAR67.23 from ZAR3.05.
Export saleable production fell by 7.7% to 6.1 million tonnes in the first half from 6.6 million tonnes previously, while domestic saleable production halved to 3.1 million tonnes from 6.4 million tonnes.
Looking ahead, Thungela revised its full-year export saleable production guidance downward to 13.0 million tonnes and 13.6 million tonnes for 2022, down from 14.0 million tonnes to 15.0 million tonnes forecast previously.
Annual export coal production was at 15.0 million tonnes in 2021.
The downward revision was due to continued inconsistent Transnet Freight Rail's rail performance prior to and following the maintenance shut.
The cola miner said it had started to evaluate alternative logistics arrangements to mitigate the risk of inconsistent rail performance.
Its shares were 1.7% higher at 1,432.00 pence each in London on Monday morning. In Johannesburg, the stock rose by 2.2% to ZAR284.87.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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Thungela Resources (TGA)