Thungela Resources has warned of a plunge in earnings for the six months to end-June as a result of weak market conditions and restructuring costs associated with winding down ageing coal mining operations.
Headline earnings per share (HEPS) are forecast to drop as much as 85% from a year earlier to between R2.10 and R1.40.
The slump is mainly due to tough market conditions and R285m in restructuring costs from winding down its Goedehoop and Isibonelo mines, which are nearing the end of their productive lives this year, the company said in a statement on Friday.
The company’s shares closed at R93.28 on Friday, down 3.3% on the day taking the losses so far this year to just over 30%.
Goedehoop Colliery, an underground coal mine located near Emalahleni in Mpumalanga, has been operating since 1983. The mine produces bituminous thermal coal, primarily for export through the Richards Bay Coal Terminal, and employs 1,456 people.
Isibonelo Colliery, an open-pit thermal coal mine near Bethal, Mpumalanga, started production in 2005. Employing about 360 workers, most of its output supplies Sasol’s synthetic fuel plant at Secunda, but it is expected to cease operations in 2026.
Thungela said in an update in March it had bought the 15% stake in the Ensham coal mine in Queensland, Australia, that it didn’t already own. It said Ensham faced geological challenges but production was expected to improve in the second half of the year, which could help stabilise volumes and revenue.
The company also reported progress on other projects despite some setbacks, including the ramp-up of the Elders underground mine in SA and the ongoing development of the Zibulo North Shaft project, scheduled for completion in 2026.
The company is due to publish its financial statements for the six months to end-June on August 18.
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