South African coal giant sees 460% surge in profit
South African coal exporter Thungela Resources is weighing opportunities to invest in new mines as it anticipates strong demand for the type of fuel it produces.
The Johannesburg- and London-listed company said on Monday that first-half profit rose almost sixfold (461%) to R1.4 billion, compared with the same period last year.
The group declared an interim dividend of 550 cents, up 175% from 200 cents last year.
Thungela attributed the improvement to better prices received for its coal and higher sales volumes.
The firm, which owns mines in South Africa and an operation in Australia producing coal mainly burned to generate electricity, is “targeting assets where we see an opportunity for us to add value,” Chief Executive Officer Moses Madondo said in an interview.
Thungela, which acquired its sole overseas mine three years ago, generated almost half of its R15.2 billion revenue in the first six months of the year through sales to India.
Despite the South Asian nation’s push to rely more on domestic coal production, Madondo is optimistic about his company’s future in supplying high-carbon material to India’s iron industry and power plants. “Their demand for coal is going to be massive,” he said.
Against the backdrop of the war in Iran, “benchmark thermal coal prices strengthened relative to the prior year, supported by higher oil and gas prices and concerns regarding global energy security,” Thungela said when announcing its results.
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