Wrap Text
2024 Annual results, final ordinary cash dividend declaration and announcement of a share buyback
THUNGELA RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2021/303811/06
JSE Share Code: TGA
LSE Share Code: TGA
ISIN: ZAE000296554
Tax number: 9111917259
('Thungela' or the 'Company' and, together with its affiliates, the 'Group')
2024 Annual results, final ordinary cash dividend declaration and announcement of a share buyback
Thungela reports strong 2024 results reflecting operational excellence and
disciplined execution of strategic priorities
• Operated a fatality-free business for 25 consecutive months
• Export saleable production increased year-on-year in South Africa and
Australia, and exceeded full year guidance
• Adjusted operating free cash flow* of R3.6 billion for the year and net cash* of
R8.7 billion at 31 December 2024, after capital expenditure of R3.4 billion
• Declaration of a final cash dividend of R11 per share, taking full year dividend
to R13 per share. Share buyback announced of up to R300 million
• Elders construction completed and production ramp-up progressing as
planned. Zibulo North Shaft progressing on schedule and in line with budget
Key performance metrics(1)
(Rand million unless otherwise stated) 31 December 2024 31 December 2023 % change
Export saleable production - South
Africa (kt) 13,595 12,214 11
Export saleable production - Ensham
Business (on a 100% basis) (kt) 4,068 1,012 302
Revenue 35,554 30,634 16
Profit for the reporting period 3,544 4,970 (29)
Earnings per share (cents/share) 2,676 3,766 (29)
Headline earnings per share
(cents/share) 2,559 3,497 (27)
Dividend per share (cents/share) 1,300 2,000 (35)
Alternative performance measures*
Adjusted EBITDA 6,255 8,454 (26)
Adjusted EBITDA margin (%) 18 28 (10pp)
Adjusted operating free cash flow 3,589 6,806 (47)
Net cash 8,671 10,176 (15)
Capital expenditure (3,396) (3,288) 3
FOB cost per export tonne excluding
royalties - South Africa (Rand/tonne) 1,130 1,084 4
FOB cost per export tonne excluding
royalties - Ensham Business
(Rand/tonne) 1,433 1,544 (7)
(1)The Group results in 2023, include the results of the Ensham Business for four months from the acquisition date of 31 August 2023 to
31 December 2023.
MESSAGE FROM JULY NDLOVU, CHIEF EXECUTIVE OFFICER
Our 2024 results demonstrate continued operational excellence and underscore the
disciplined execution of our strategic priorities. Full-year export saleable production
exceeded guidance in both South Africa and Australia. Notably, South African
production grew for the first time in three years due to increased productivity and
improved rail performance. The higher production and a focus on cost efficiencies
resulted in a free-on-board (FOB) cost per export tonne* below guidance. Our two
key life extension projects, Elders and Zibulo North Shaft, remain on schedule and
on budget. Safety remains our first value and we are unconditional about protecting
the lives of our people. We are proud to report that we have been operating a
fatality-free business for 25 consecutive months.
Our increased focus on accountability and our safety culture is delivering meaningful
safety improvements. The Group total recordable case frequency rate (TRCFR) was
1.93, compared to 2.80 in 2023. South Africa achieved a historic low TRCFR of 1.07,
compared to 1.40 in the prior year. In Australia, the TRCFR improved significantly to
13.21, compared to 22.63 in the full year 2023, reflecting a strong focus on
improving conditions, leadership visibility and critical controls.
Group revenue increased by 16% year-on-year to R35.6 billion, as Ensham was
included for the full 12 months in 2024, in comparison to the four months following
acquisition in the prior year (September to December 2023). The Group generated
adjusted EBITDA* of R6.3 billion and net profit of R3.5 billion, with the Ensham
Business contributing R676 million to net profit in 2024. The margin contribution from
our operation in Australia and the marketing business in Dubai showcase the
benefits of our geographic diversification strategy. The Group ended the year with
net cash* of R8.7 billion.
While the impact of a softer price environment across the Richards Bay and
Newcastle Benchmark coal prices continues to impact our financial results, it is
encouraging to note the improvement in the performance of Transnet Freight Rail
(TFR) post the annual maintenance shutdown period, which was completed in July
2024. TFR achieved a run rate of 51.9Mtpa for 2024, an 8.4% increase in
performance from 2023 for the industry, with an average annualised run rate of
56.2Mt in the second half of the year, from an annualised run rate of 47.3Mt in the
first half of the year.
In South Africa, export saleable production of 13.6Mt ended above the guidance
range of 11.5Mt to 12.5Mt, and increased by 11% year-on-year, from 12.2Mt in 2023.
The higher production output in 2024 was particularly notable given that three
underground mining sections were removed in 2023 in response to the rail
constraints. In line with the improved rail performance, our South African operations
ramped up production without adding additional capacity or material cost to the
business. FOB cost per export tonne excluding royalties* of R1,130 was below the
low end of the guidance range of R1,170, mainly due to higher production volumes.
In Australia, Ensham recorded strong export saleable production of 4.1Mt (on a
100% basis), an increase of 52% from the annualised run rate of 2.7Mt at the date of
acquisition. The improvement is mainly attributable to productivity projects and the
reconfiguration of the mine to include a fault development crew dedicated to
traversing geological faults, while the remaining sections mine in productive areas.
FOB cost per export tonne excluding royalties* of R1,433 was below the low end of
the guidance range of R1,590, mainly driven by higher production and cost initiatives
implemented during the year.
Global thermal coal market landscape
The softer thermal coal price environment continued throughout the year. Milder
winter conditions in the Northern Hemisphere led to subdued demand in Europe,
where coal and gas stock levels remained elevated, impacting the South African coal
market. The market for high calorific value product from Australia was shaped by
high stock levels brought upon by sluggish seaborne demand in the main Asian coal
markets, such as China, India, Japan and South Korea.
We remain confident in the long-term fundamentals of the role of coal in the energy
mix in support of global energy demand. The International Energy Agency confirmed
in its 'World Energy Outlook 2024' report published in October 2024, that the outlook
for coal demand remains firm. There is strong energy demand from emerging
markets, with countries such as China and India continuing to invest in new coal-
fired power stations to meet the energy needs required to sustain economic growth,
as well as demand that is maintained due to delays in projected closure dates for
existing coal-fired power stations. Seaborne traded thermal coal demand is expected
to remain close to one billion tonnes in 2025. It is important to note that the higher
coal demand in these regions more than offsets the decline in the use of coal in
developed economies.
Ongoing geopolitical tensions and uncertainties continue to impact the energy
markets, leading to coal and gas supply volatility. Seaborne thermal coal market
supply may be impacted by in-country supply in key emerging markets, such as
China and India.
Progress on our strategic priorities
We have made significant progress in 2024 towards building a sustainable and long-
life business across our geographies. In South Africa, our two life extension projects,
Elders and Zibulo North Shaft, are key to improving our life of mine and long-term
competitiveness, and remain on schedule and within budget. Total expansionary
capital expenditure for these two projects since commencement is R3.6 billion. The
construction phase of the Elders project is complete, and the ramp-up is progressing
well, with the deployment of two production sections to date. The mine is anticipated
to produce at a run rate of 4Mt of run of mine coal per annum, upon reaching steady
state in early 2026. The Zibulo North Shaft project is ongoing with completion
expected in 2026, which will extend the current underground operation's life to 2038.
The mine is expected to produce at a run rate of up to 8Mt of run of mine coal per
annum on completion of the project.
The Lephalale Coal Bed Methane (LCBM) project, situated in the Waterberg coal
field in Limpopo in South Africa, is a significant methane gas resource that we are
evaluating for development opportunities. A capital investment of approximately
R400 million will be made in 2025 for the acquisition of a modular liquefied natural
gas plant and associated site infrastructure, which will demonstrate the value in use
of the gas.
The Rietvlei coal mine was established to develop a domestic-focused coal project
with a direct benefit to local communities through an equity shareholding. The
intention of Thungela, with an effective 34% shareholding, was to ensure the
sustainability of the operation while our black economic empowerment partners
developed the project, and at the appropriate time to exit our position. With the mine
now fully operational and a domestic contract in place, Thungela resolved to sell its
interest to the existing partners for a total cash consideration of R186 million. The
transaction demonstrates economic inclusion and our partners, together with the
local communities, participate in the full economic benefits of the operation.
In December 2024, we announced our intention to acquire a further 15% interest in
the Ensham Mine for a total consideration of AUD48 million. We are pleased to
advise that the relevant conditions precedent have been met, and the transaction
was completed on 28 February 2025. On 14 March 2025, we also announced that
we had entered into an agreement with Audley Capital and Mayfair to acquire their
27.5% interest in Sungela Holdings, for an upfront cash consideration of USD1.7
million, as well as contingent deferred consideration of up to USD15.5 million
payable over a period of up to six years. Upon completion of this transaction, the
Group will own 100% of the Ensham Business. These transactions enable us to
further execute our geographic diversification strategy in Australia, enhancing the
Group's production profile and earnings, as well as maximising value through
Thungela Marketing International.
The resource development plan at Ensham, which was initiated post acquisition, is
progressing well. This will assist us to identify the full potential of the asset and the
related capital required to extract value from brownfield opportunities.
Shareholder returns and capital allocation
In 2024, we completed two share buybacks for a total consideration of R601 million,
or 3.2% of issued share capital. The share buybacks acknowledge the diverse
preferences of our shareholder base and reflect our confidence in the Group's
attractive long-term outlook and robust financial position.
The Group generated cash flows from operating activities of R5.3 billion for the year.
After investing R1.7 billion in sustaining capital expenditure*, this resulted in an
adjusted operating free cash flow* of R3.6 billion for the year. We remain committed
to building a long-life competitive business with an expansionary capital spend of
R1.7 billion during 2024.
Driving our ESG aspirations informs our approach to our existing business, how we
plan future projects and how we evaluate potential acquisitions. In Australia, we
contributed R970 million into an investment vehicle, similar to the green fund in
South Africa, to secure the necessary financial surety for the Ensham rehabilitation
liabilities, while we pursue acceptance into the Queensland Financial Provisioning
Scheme. In South Africa, we contributed a further R204 million into the green fund in
2024. Including these investment contributions, as well as the ongoing spend on
rehabilitation activities, the Group environmental liability coverage* has increased to
54%, compared to 40% in 2023.
At 31 December 2024, the Group's net cash* position was R8.7 billion. We continue
to reserve R900 million to fund our life extension projects to completion and R400
million for the LCBM project. Given the current weak market conditions, the board
considers it appropriate to maintain a cash buffer of R5.4 billion. The Group holds
undrawn credit facilities of R3.2 billion.
The board reaffirms its commitment to the dividend policy, which is to distribute a
minimum of 30% of adjusted operating free cash flow* to shareholders. A final
dividend of R11 per share has been declared, taking total dividend to R13 per share.
The board has also approved a share buyback of up to R300 million. Total returned
to shareholders, including share buybacks of R460 million, is 64% of adjusted
operating free cash flow* for 2024.
Since listing the business in 2021, the Sisonke Employee Empowerment Scheme
and the Nkulo Community Partnership Trust have together received R1.7 billion,
including R204 million relating to 2024, demonstrating Thungela's ability to deliver
strong returns to all of our stakeholders.
Looking ahead
In line with our purpose - to responsibly create value together for a shared future -
we are confident that our disciplined capital allocation approach will ensure that
Thungela delivers value for our people, communities and stakeholders over the long
term.
In particular, our focus remains on operating a fatality-free business and delivering
operational excellence by controlling the controllables. As we position the business
to take advantage of the long-term fundamentals supporting coal demand globally,
we remain committed to productivity improvements and to enhancing the cost
competitiveness of our operations, driven by the Elders and Zibulo North Shaft
projects. We are confident that executing our strategic priorities will create
meaningful shareholder value.
OPERATIONAL GUIDANCE - 2025
South Africa Ensham
Export saleable production (Mt) (Ensham on a 100% basis) 12.8 – 13.6 3.7 – 4.1
FOB cost per export tonne* (Rand/tonne) 1,220 – 1,300 1,650 – 1,780
FOB cost per export tonne excluding royalties* (Rand/tonne) 1,210 – 1,290 1,470 – 1,580
Capital – sustaining* (Rand million) (Ensham on a 100% basis) 1,400 – 1,700 700 – 950
Capital – expansionary (Rand million) 1,100 – 1,200 nil
Royalties are calculated using an assumed Richards Bay Benchmark coal price of USD102.00 per tonne and an assumed
Newcastle Benchmark coal price of USD125.00 per tonne.
South African operations
Export saleable production guidance for 2025 of 12.8Mt to 13.6Mt is informed by
improved productivity and performance of TFR. The range is based on expected rail
performance of between 54Mtpa, at the lower end of the guidance, and 58Mtpa at
the upper end. The midpoint of the guidance is aligned with the improved annualised
run rate observed in the second half of 2024.
Our production footprint is entering a period of transition as the Goedehoop mine
and Zibulo opencast operations reach end of life in 2025. The Elders and Zibulo
North Shaft projects will continue to ramp up to full production during 2026.
FOB cost per export tonne excluding royalties* is expected to be between R1,210
and R1,290. Including royalties, the range is between R1,220 and R1,300 per tonne,
based on an assumed Richards Bay Benchmark coal price of USD102 per tonne.
Sustaining capital expenditure* is expected to range between R1,400 million and
R1,700 million. Expansionary capital expenditure is expected to be between R1,100
million and R1,200 million, which includes ongoing spend primarily on the Zibulo
North Shaft project, and R400 million related to the LCBM project.
Ensham
Export saleable production guidance for 2025 is between 3.7Mt and 4.1Mt (on a
100% basis). The guidance is consistent with 2024 production as it allows for the
mine to traverse known geological faults during the year. We have made good
progress on improving productivity and will seek further opportunities as our South
African and Australian operations continue to share best practices.
FOB cost per export tonne excluding royalties* is expected to be between R1,470
and R1,580. Including royalties, the range is between R1,650 and R1,780 per tonne,
based on an assumed Newcastle Benchmark coal price of USD125 per tonne. We
have already started to review opportunities for further productivity improvement and
cost savings at Ensham.
Sustaining capital expenditure* is expected to be between R700 million and R950
million (on a 100% basis). This includes once-off capital expenditure of
approximately R250 million, predominantly on land in order to secure outstanding
mining licences.
DIVIDEND DECLARATION AND SHARE REPURCHASE
The board has declared a final ordinary cash dividend of R11.00 per share, payable
to shareholders on the Johannesburg Stock Exchange and London Stock Exchange
in April 2025 and May 2025, respectively.
In addition, the board has authorised a share repurchase of up to R300 million,
subject to market conditions. This will be executed in the period commencing 18
March 2025 and, unless revised or terminated earlier, ending 4 June 2025, being the
last trading day prior to the Group's next annual general meeting, scheduled on
Thursday, 5 June 2025, and will be subject to the applicable legal and regulatory
requirements.
Further details regarding the dividend payable to shareholders of Thungela as well
as the share repurchase can be found in a separate announcement dated 17 March
2025 on the Johannesburg Stock Exchange News Services (SENS) and the London
Regulatory News Services (RNS).
FORWARD-LOOKING STATEMENTS
This document includes forward-looking statements. All statements included in this
document (other than statements of historical facts) are, or may be deemed to be,
forward-looking statements, including, without limitation, those regarding Thungela's
financial position, business, acquisition and divestment strategy, dividend policy,
plans and objectives of management for future operations (including development
plans and objectives relating to Thungela's products, production forecasts and
resource and reserve positions). By their nature, such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Thungela, or industry results, to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Thungela therefore
cautions that forward-looking statements are not guarantees of future performance.
Any forward-looking statement made in this document or elsewhere is applicable
only at the date on which such forward-looking statement is made. New factors that
could cause Thungela's business not to develop as expected may emerge from time
to time and it is not possible to predict all of them. Further, the extent to which any
factor or combination of factors may cause actual results to differ materially from
those contained in any forward-looking statement are not known. Thungela has no
duty to, and does not intend to, update or revise the forward-looking statements
contained in this document after the date of this document, except as may be
required by law. Any forward-looking statements included in this document have not
been reviewed or reported on by the Group's independent external auditor.
Investors are cautioned not to rely on these forward-looking statements and are
encouraged to read the Annual Financial Statements for the year ended 31
December 2024 (Annual Financial Statements 2024), which are available from the
Thungela website via the following web link:
https://www.thungela.com/investors/financial-results.
ALTERNATIVE PERFORMANCE MEASURES
Throughout this Results Announcement a range of financial and non-financial
measures are used to assess our performance, including a number of financial
measures that are not defined or specified under International Financial Reporting
Standards (IFRS Accounting Standards), which are termed 'alternative performance
measures' (APMs). Management uses these measures to monitor the Group's
financial performance alongside IFRS Accounting Standards measures, to improve
the comparability of information between reporting periods. These APMs should be
considered in addition to, and not as a substitute for, or as superior to, measures of
financial performance, financial position or cash flows reported in accordance with
IFRS Accounting Standards. APMs are not uniformly defined by all companies,
including those in the Group's industry. Accordingly, these measures may not be
comparable with similarly titled measures and disclosures by other companies. In
this results announcement, APMs are denoted with an asterisk (*).
RESULTS ANNOUNCEMENT
This Results Announcement, including the forward-looking statements, is the
responsibility of the directors of Thungela.
Shareholders are advised that this Results Announcement is only a select extract of
the information contained in the Annual Financial Statements 2024 and does not
contain full or complete details. Any investment decisions by investors and/or
shareholders should be based on a consideration of the full Annual Financial
Statements as a whole and investors and/or shareholders are encouraged to review
the Annual Financial Statements 2024, which are available on the Thungela website
via the following web link: https://www.thungela.com/investors/financial-results, and
available on the JSE's cloudlink, at
https://senspdf.jse.co.za/documents/2025/JSE/ISSE/TGAE/TGAFY2024.pdf
A conference call and webcast relating to the details of this Results Announcement
will be held at 12:00 SAST (10:00 GMT) on Monday, 17 March 2025. Details to
register for the conference call and webcast are available below:
Conference call:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationN
umber=4371045&linkSecurityString=120f2faaf5
Webcast: https://78449.themediaframe.com/links/thungela250317_1200.html
The consolidated financial statements for the year ended 31 December 2024 were
audited by PricewaterhouseCoopers Inc. who have issued an unqualified audit
opinion. The full independent auditor's report and Annual Financial Statements 2024
are available for viewing on the Thungela website via the following web link:
https://www.thungela.com/investors/finacial-results.
This Results Announcement has not been audited or reviewed by the Group's
independent external auditor. Any reference to future financial performance included
in this announcement has not been separately reported on by the Group's
independent external auditor.
The Company's registered office is located at: 25 Bath Avenue, Rosebank,
Johannesburg, 2196, South Africa.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the market abuse regulation (EU)
no. 596/2014 as amended by the market abuse (amendment) (UK mar) regulations
2019. Upon the publication of this announcement via the regulatory information
service, this inside information is now considered to be in the public domain.
On behalf of the board of directors
Sango Ntsaluba, Chairperson
July Ndlovu, Chief executive officer
Johannesburg (South Africa)
Date of SENS release: 17 March 2025
Investor relations
Hugo Nunes
Email: hugo.nunes@thungela.com
Shreshini Singh
Email: shreshini.singh@thungela.com
Media
Hulisani Rasivhaga
Email: hulisani.rasivhaga@thungela.com
UK Financial adviser and corporate broker
Panmure Liberum Limited
Tel: +44 20 3100 2000
Sponsor
Rand Merchant Bank
(A division of FirstRand Bank Limited)
Tel: +27 11 282 8000
Date: 17-03-2025 09:00:00
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