Thungela Resources, a prominent thermal coal exporter led by South African executive July Ndlovu, disclosed a significant 73-percent plunge in its profits, marking a notable setback for the company at the close of its 2023 fiscal year.
According to the recently published financial results, Thungela’s at the end of its 2023 fiscal year plummeted to R4.97 billion ($263.18 million) from R18.21 billion ($958.63 million) recorded in the preceding year. The decline is attributed to depressed coal prices along with persistent rail constraints plaguing operations in South Africa.
Thungela prioritizes safety, shareholders after a challenging year
Commenting on the financial results, Thungela CEO July Ndlovu emphasized the company’s commitment to safety while acknowledging the unfortunate loss of a colleague in February 2023. Despite the financial setback, Ndlovu expressed optimism about the company’s strategic initiatives, including geographic diversification through acquisitions in Australia and the extension of key mining operations in South Africa.
Despite the profit decline, Thungela managed to maintain a robust financial position, generating an adjusted EBITDA of R8.5 billion ($447.47 million) and ending the year with a net cash position of R10.2 billion ($536.96 million). Ndlovu highlighted the company’s agility in navigating market challenges and reiterated its commitment to maximizing shareholder returns through prudent capital allocation.
Thungela Resources thrives under July Ndlovu’s watch
Since its 2021 demerger from Anglo-American, Thungela has undergone significant expansion under Ndlovu. His strategic initiatives transformed the company, steering it away from past losses and toward substantial cash flow generation.
Despite a decline in profit, Thungela maintained strong cash generation and a robust net cash position, demonstrating resilience. The company’s commitment to shareholders is unwavering, as evidenced by the declaration of a final ordinary cash dividend of R10 ($0.5264) per share. This brings the total 2023 dividend distribution to R20 per share ($1.0525), for a total payout of R2.8 billion ($147.38 million).
Thungela’s 2023 results reflect the headwinds faced by the thermal coal industry, including market fluctuations and operational challenges. The company remains positioned for sustained growth under Ndlovu’s leadership. His focus on safety, strategic acquisitions, and operational efficiencies will be key in navigating this challenging environment.
