Thermal coal producer and exporter Thungela Resources delivered an improved performance in the first half of this year, despite difficult market conditions and a stronger rand weighing on export benefits, CEO Moses Madondo said on August 17.

During a conference call to discuss the company’s interim results of the six months ended June 30, he highlighted a continued focus on maintaining safe operations, driving operational excellence and applying a disciplined approach to capital allocation underpinning this performance.  

Group revenue increased to R15.2-billion, supported by benchmark coal prices that were 15% and 25% higher than the comparable period in South Africa and Australia, respectively.

Thungela reported adjusted earnings before interest, taxes, depreciation and amortisation of R1.3-billion and profit for the period of R1.4-billion, including a R1-billion noncash gain from the disposal of the Kleinkopje mining right.

Earnings per share increased by 467% to R10.95.

Cash flows from operating activities was R2.6-billion. After an investment of R705-million in sustaining capital, this resulted in adjusted operating free cash flow of R1.9-billion.

As at June 30, the group’s net cash position was R6.1-billion.

Thungela has maintained its full-year guidance, as it expects a stronger performance in the second half of the year. South Africa export saleable production guidance for the full-year remains at 13-million to 13.6-million tonnes; while the Ensham export saleable production guidance remains unchanged at 3.9-million to 4.2-million tonnes.

Following a strategy review, it was concluded that this remains focused on growth and building resilience through the cycle to create long-term value for shareholders.  

Madondo emphasised that the priorities remain focused on maximising the value of existing assets, pursuing selective growth opportunities where the group can apply its expertise and developing future optionality for long-term growth.

Thungela will continue to actively manage its asset portfolio to enhance earnings, strengthen resilience and create value.

The Annea Colliery and Zibulo North Shaft life-extension projects were successfully delivered on time and within budget and continue to ramp up.

The sale of the Kleinkopje mining right was completed during the period and, together with the sale of Goedehoop North, which is expected to be completed in the second half of the year, the group expects its South African environmental liabilities to be fully cash-collateralised by year-end.

In South Africa, improved performance at Khwezela, driven largely by enhanced water management activities, together with the continued strong contribution from Mafube, underpinned export saleable production of 6.3-million tonnes at a free-on-board (FoB) cost per export tonne including royalties of R1 374, which is within the guidance range.

Export sales of 7.4-million tonnes, including third-party sales of 600 000 t, exceeded production during the period.

This was enabled by improved rail performance from Transnet Freight Rail (TFR) and the group’s ability to leverage additional rail allocation opportunities across the export corridor.

TFR’s performance improved to an annualised run rate of 59.9-million tonnes, from 56.8-million tonnes in 2025.

The average realised export price through the Richards Bay Coal Terminal was $89.18/t, representing a 15.7% discount to the benchmark price.

In Australia, Ensham delivered a strong first-half performance, with export saleable production increasing to 2.2-million tonnes, compared with 1.6-million tonnes in the prior period. The FoB cost per export tonne including royalties decreased to R1 466, below the guidance range.

The average realised export price was $110.92/t, representing a discount of 13.3% to the benchmark price. This discount is expected to narrow in the second half of the year as the effect of previously contracted fixed-priced tonnes moderates.

Thungela declared an interim dividend of R5.50 apiece, a total cash distribution of R773-million.

In addition, the Sisonke Employee Empowerment Scheme and the Nkulo Community Partnership Trust will receive R57-million collectively.

While near-term market volatility is likely to persist, longer-term market dynamics remain supportive, Madondo noted.

The anticipated global gas supply surplus has been delayed, while the pace of the energy transition continues to be more gradual than previously expected. A relatively balanced supply and demand outlook is expected to provide greater underlying support for coal markets, notwithstanding periodic price volatility.

The group remains confident in the long-term fundamentals of coal and the role of coal in the global energy mix.

Thungela believes it is well positioned to navigate the cycle, supported by a strong balance sheet, a portfolio of quality assets and a strategy focused on growth, resilience and long-term value creation for shareholders.