South African thermal coal miner Thungela Resources Limited (LSE:TGA) gave a very detailed trading update in June, so there should not be too many surprises in its update next week.
Benchmark coal prices have weakened it said, with South African Richards Bay down 18% and its discount widening slightly to 15%.
As a consequence earnings per share for the first half of 2024 is expected to be between R7.00 and R10.00 some R12.45 and R15.45 lower than the H1 2023 EPS of R22.45 per share - a decrease of between 55% and 69%.
“The decrease in our earnings is mainly attributable to the decrease in the benchmark coal prices compared to the prior period compounded by a drawdown on stockpiles from December 2023 as well as an increase in lower quality export coal in the export sales mix,” it said.
Shares in the former Anglo American subsidiary have ticked higher after that update with Glencore’s decision to stick with its enlarged coal arm due to the potential cash flow benefit improving the mood surrounding the sector.
Thungela was trading at 535p on Friday.