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Thungela Resources Limited, a leading thermal coal exporter led by South African executive July Ndlovu, has revealed that it expects full-year earnings to double above $800 million in the fiscal year ending December 2022.
Led by Ndlovu, Thungela is a market leader in the production and export of high-quality, low-cost thermal coal. It operated as a branch of Anglo-American until June 6, 2021, when it demerged and listed its shares on the Johannesburg and London stock exchanges.
The group stated in its most recent trading update that it expects its headline earnings — the primary profit measure in South Africa — to increase by 97 percent above $800 million at the end of its 2022 fiscal year, eclipsing the R6.66 billion ($447.7 million) in earnings it achieved in 2021 when its revenue rose by 601 percent from R3.75 billion ($251.9 million) to R26.28 billion ($1.76 billion).
It revealed that the increase in earnings can be attributed to price gains in coal, which offset the negative impact of poor rail performance on its export shipments during the period under review.
It explained that coal prices had been driven by demand, particularly from Europe, whose energy supplies had been disrupted by Russia’s invasion of Ukraine, with benchmark coal prices averaging $276.6 per tonne for the year to date, up from $124.1 per tonne last year.
In response to its trading update, shares in the top-performing company rose by two percent at midday on the Johannesburg Stock Exchange, indicating increased buying interest, before closing 3.57 percent lower than its opening price of R289.4 ($16.9) per share.
At the time of writing, the market value of Ndlovu’s 0.74-percent stake in Thungela Resources was R290 million ($17 million), thus cementing his position as one of the richest executives in South Africa.
