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Thungela Resources has declared an interim dividend of R8.2 billion, or R60 per share, following a record half-year in which profit rocketed on the back of strong export coal prices.
The coal miner, which was spun out of Anglo American in June last year, reported profit of R9.6 billion compared with R351 million in the first half of 2021.
The dividend represents a payout of 92% of adjusted operating free cash flow, and is substantially higher than the company's dividend policy of a minimum payout ratio of 30%.
Considering the increase in the share price – 460% in the past year - together with the 2021 final and 2022 interim dividends, Thungela has generated a total shareholder return of 1 138% since listing through to the end of June 2022.
July Ndlovu, Thungela CEO, said the first half had seen "good progress on a number of fronts", including the delivery of "another set of exceptional financial results driven by elevated benchmark coal prices in a volatile operating environment".
Demand for affordable energy sources such as thermal coal escalated amid the energy security crisis, which was exacerbated by the escalation of the Russia-Ukraine conflict. Coupled with supply constraints in major coal producing regions, this resulted in the price of thermal coal increasing to unprecedented levels, Thungela said.
The miner's ability to fully take advantage of the strong price environment in the first half of 2022 was however hindered by Transnet Freight Rail's continued underperformance. Notwithstanding this challenge, adjusted operating free cash flow of R8.9 billion resulted in a net cash position of R14.8 billion in the six months ended in June – up from R3 billion in the comparative period in 2021.
Full year guidance for export saleable production has however been revised down to between 13 million tons and 13.6 million tons as a result of poor rail performance.