Thungela Resources Shares Under Pressure as H1 Profit Drops, Dividend Held Steady

Thungela Resources (TGA.L), the South African thermal coal exporter, is facing headwinds as evidenced by its interim results for the six months ended June 30, 2025.

The report revealed a significant drop in profit due to continued pressure on coal prices, though the dividend remains unchanged. Thungela shares are down around 2.6% on Monday, trading around the 374.5p mark.

Revenue decreased by 12% year-over-year, landing at R14.813 billion compared to R16.752 billion in the same period last year.

Profit for the period plummeted by 79%, falling to R248 million from R1.186 billion. Consequently, earnings per share and headline earnings per share both saw an 80% decline, settling at 193 cents per share.

Despite the profit slump, Thungela's board has declared an interim gross ordinary cash dividend of 200 cents per share, matching last year's payout.

This decision signals a degree of confidence in the company's underlying cash generation abilities, despite the challenging market conditions.

In addition to the dividend, Thungela announced a share repurchase program commencing August 19, 2025, and continuing until the day before the next annual general meeting. The aggregate purchase price will not exceed R140 million.

Adjusted EBITDA, a key measure of operational profitability, fell by 68% to R691 million, compared to R2.146 billion in the prior year.

Thungela stated that the global operating environment during the period was characterized by increasing geopolitical uncertainties and tariff escalations that disrupted global supply chains.

“These uncertainties resulted in weak demand in key coal demand regions, resulting in softer prices, last seen during the Covid-19 pandemic,” the company said.

AskTraders Takeaway:

The unchanged dividend and share repurchase program might offer some reassurance to shareholders, but the sharp decline in profitability is a concern. Expect continued volatility in Thungela's share price.