Johannesburg, South Africa — Thungela Resources has issued a cautionary update ahead of its interim results, projecting a steep decline in both earnings per share (EPS) and headline earnings per share (HEPS) for the six months ending June 30. The company expects these key metrics to fall by between R7.42 and R8.12 year-on-year, translating to a staggering 78% to 85% plunge in earnings.
This dramatic downturn positions earnings attributable to shareholders between R180 million and R280 million, a sharp contrast to the significantly higher levels reported in the corresponding period in 2024. EPS is forecasted to range between R1.40 and R2.10, down from R9.52 in the first half of the previous year. Similarly, HEPS is projected to settle within the R1.40 to R2.10 range, compared to R9.52 in the prior comparable period.
Thungela attributes this significant decline to a convergence of challenging market conditions and substantial restructuring expenses. The company incurred R285 million in costs associated with decommissioning and winding down operations at both the Goedehoop and Isibonelo mines as they near the end of their productive lifespan.
What’s Driving the Downturn?
Several factors underpin Thungela’s softening performance. A weakening global coal market—driven by volatile demand, pricing pressure, and shifting energy infrastructure—has eroded profit margins. At the same time, operational realignments and mine closures, although necessary for long-term sustainability, carry heavy near-term cost burden.
The mining sector, particularly coal producers, continues to grapple with energy transition pressures, regulatory uncertainty, and rising input costs. In this context, Thungela’s wind-down of legacy operations at Goedehoop and Isibonelo represents a difficult but strategically prudent move, designed to streamline its portfolio and concentrate resources on more productive assets.
Also Read: Decline in Project Finance Worsening Africa’s Commodity Dependence
What Lies Ahead?
Shareholders and industry watchers will be closely monitoring the company’s full interim results, expected on or about 18 August. Key questions to watch include whether Thungela’s restructuring efforts—though costly—will yield cost efficiencies going forward and how the company plans to navigate the transition amid broader market challenges.
The interim report will also offer insight into Thungela’s forward-looking strategy: whether it can stabilize profits through operational efficiencies, resource reallocation, or innovation in low-carbon solutions to secure market share.
Thungela’s recent update underscores the sector-wide pressures coal miners face, where strategic trade-offs between immediate profitability and long-term viability have become increasingly pronounced.
