Thungela Resources gained the most in more than five months on Monday, after the group announced an increase in revenue and a R300m share buyback programme.
The company reported a 16% increase in revenue to R35.bn for the year to end-December, driven primarily by the full-year inclusion of its Australian Ensham mine and improved production volumes in SA.
Thungela only included Ensham’s performance for a partial year following its acquisition in September 2023.
The Ensham mine delivered 4.1-million tonnes of coal, with production up 302% year on year. In SA, export saleable production rose by 11% to 13.6-million tonnes, surpassing guidance ranges.
The group generated adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of R6.3bn, and net profit of R3.5bn, with the Ensham business contributing R676m to net profit.
Headline earnings per share (HEPS) declined 27% to 2,559c due to “softer thermal coal prices and global demand fluctuations”, the company said in the statement. The group declared a final cash dividend of R11 per share, taking the full-year dividend to R13.
In addition to the dividend declaration, Thungela announced a share repurchase programme of up to R300m, which will run from March 18 to June 4.
The company said its operational performance was also helped by Transnet’s improved rail performance. Transnet’s performance increased by 8.4% following its annual maintenance shutdown in July 2024, reaching a run rate of 51.9-million tonnes for the year.
The company said the improvement enabled it to leverage better rail availability and increase its export sales.
Despite these gains, the company faced headwinds from weaker thermal coal prices in some regions and subdued demand in Europe due to mild winter conditions and high stock levels.
“While lower than the previous year, an adjusted operating free cash flow of R3.6bn is a positive result, especially considering the challenging market conditions and significant capital expenditures,” said IG senior market analyst Shaun Murison.
“The company is returning value to shareholders, making strategic investments and maintaining a healthy cash buffer.”
“Despite these positives, Thungela faced challenges in 2024, primarily stemming from a softer thermal coal price environment. Additionally, geopolitical tensions and uncertainties continue to impact energy markets, potentially leading to coal and gas supply volatility,” Murison said.
“Rail performance, while improved, remains a risk factor in SA, and the company's operations in Australia. Despite improving, the risk is still relatively high.”
By market close, the company’s share price had gained the most in more than five months, up 5.79% to R114.02.
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