TGA Share Price JSE Finds Support After 14% Dive as Thungela Expects Higher Coal Prices and Production Strength
Thungela Resources shares tumbled after posting a sharp annual loss after coal price weakness triggered major impairments, though recent...
Quick overview
- Thungela Resources reported a net loss of R7.1 billion for the year ended December 31, a significant decline from a profit of R3.6 billion in 2024 due to falling coal prices.
- The company's share price dropped 14% following the earnings announcement but has seen some recovery amid rising commodity prices in March.
- Despite the challenging market conditions, Thungela exceeded its production guidance, producing 17.8 million tonnes of export saleable coal in 2025.
- Thungela maintained a strong cash position, allowing it to declare a final dividend of 200 cents per share, reflecting management's confidence in its long-term outlook.
Thungela Resources shares tumbled after posting a sharp annual loss after coal price weakness triggered major impairments, though recent commodity strength is offering some relief.
Coal Price Decline Drives Heavy Losses
Thungela Resources reported a difficult set of results for the year ended December 31, as falling coal export prices significantly impacted earnings. The company recorded a net loss of R7.1 billion, a sharp reversal from the R3.6 billion profit posted in 2024.
A key driver of this downturn was a R8.8 billion non-cash impairment, reflecting the decline in coal prices over the period. Revenue fell 17% to R29.6 billion, further pressured by a stronger South African rand, which reduced export competitiveness.
At the headline level, earnings deteriorated significantly, with headline earnings per share dropping 125% year-on-year.
Retreat After and Recent Recovery
The market reacted negatively to the weak results and impairments, with the share price falling from around R180 to R155. However, sentiment has improved in March, as commodity prices rebounded amid global supply concerns and geopolitical tensions.
Although the Middle East conflict has had only a limited direct impact on coal, the broader rise in raw material prices has helped lift Thungela’s shares in recent weeks.
Operational Strength Offsets Weak Pricing
Despite the challenging pricing environment, Thungela delivered solid operational performance. The company exceeded its production guidance, producing 17.8 million tonnes of export saleable coal in 2025.
Key infrastructure projects also reached completion, including life extensions at the Goedehoop Annea Colliery and Zibulo North Shaft, which are expected to support future output growth.
Adjusted EBITDA came in at R1.2 billion, while adjusted operating free cash flow reached R396 million, highlighting underlying resilience despite the headline loss.
Market Reaction and Share Performance
Following the announcement, Thungela’s stock tumbled 14% to close at R155 on Wednesday. Shae prices have been on a three-year decline that began in 2022 when the share price was above R383. In March, the stock rebounded in line with a broader recovery in commodity market which sent TGAj shares above the 200 weekly SMA (purple), but it dipped back this week after the earnings. So, the long-term trend remains still bearish unless prices break above key moving averages on the weekly chart.
TGAj Chart Weekly – MAs Keeping the Price Subdued
Strong Balance Sheet Supports Dividend
Thungela maintained a healthy cash position, ending the year with net cash of approximately R5.1–R6.1 billion. This financial strength enabled the company to declare a final dividend of 200 cents per share, bringing total annual payouts to R4 per share.
The decision to maintain dividends despite losses underscores management’s confidence in the company’s liquidity and long-term outlook.
- Net Loss: ZAR 7.085 billion (swung from profit in 2024).
- Revenue: ZAR 29.599 billion (decreased from ZAR 35.554 billion).
- Headline Loss per Share: 647 cents (flipped from earnings of 2,559 cents in 2024).
- Final Dividend: 200 cents per share (declared March 2026).
- Cash Flow: Generated ZAR 2.4 billion in operating cash flow, ending with a strong net cash position of ZAR 5.1 billion.
- Operational Performance: Export sales increased to 17.8 million tonnes.
- Lower Coal Prices: Declining benchmark coal prices significantly reduced profitability.
- Stronger Rand: A stronger South African Rand against the US dollar reduced revenue for export-focused sales.
- Impairments: The group took non-cash impairment losses of R8.8 billion due to lower price forecasts.
- Logistics Improvement: Transnet freight rail performance improved by 9%, easing some logistical constraints.
Outlook: Volatility Remains Key Risk
Looking ahead, Thungela’s performance will remain closely tied to coal price trends, currency movements, and global demand conditions.
While operational execution and a strong balance sheet provide stability, the company remains exposed to commodity price volatility. The recent rebound in prices offers some optimism, but sustained recovery will depend on broader market dynamics.
For now, Thungela appears to be navigating a transitional phase—balancing short-term pressure with longer-term production strength and financial resilience.
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