THUNGELA Resources lowered its production forecast for thermal coal exports in 2023 as it got ready for yet another subpar performance from Transnet, the state-owned rail and port corporation of South Africa.Due to theft, vandalism, and operational inefficiencies, coal deliveries for export to Richards Bay decreased to 50.43 million tonnes (Mt) in 2022, its lowest level in 30 years. The 'tempo' (annualised tonnage) for the year is roughly 44Mt, notwithstanding an improvement in March.The issues with Transnet in part prompted a change in Thungela's liquidity provisions. The company previously claimed that R5 billion to R6 billion would be enough to get them through periods of low coal prices, but this year, that "buffer" was raised to R8 billion.

For the 12 months ending December 31, Thungela's export production would vary between 10.5Mt and 12.5Mt. This is significantly less than the 14.5Mt exported in 2021. For its 2022 fiscal year, Thungela reported export sales of little more than 13Mt.

 The three million tonnes of coal stocks the company now had on hand at its mines—which it should have been exporting—were what it hoped to use. Assuming the current rand/dollar exchange rate, the stockpile represents an opportunity cost of R15.1 billion at Thungela's average export sales price of $229.21 per tonne from the previous year.

The CEO of Thungela, July Ndlovu, stated, "We remain committed to working with Transnet to address the problem affecting rail performance and call on government to support these efforts in order to ensure that the mining industry can continue to produce value for South Africa and its people.

He made this observation in notes to Thungela's full-year results, which were released for the 12 months that ended in December and showed a profit of R18.2 billion for the year as opposed to R6.9 billion the year before. Earnings per share totaled 127 (2022: R64,30 per share), while headline earnings were R130,80 (R60,66 per share). Strong export prices were the main factor in the performance. The average price for Thungela was $229.21/t, down from $103,82/t in 2021. In 2022, the benchmark price was $270,87/t on average.

The dividend payment for the year, which consists of a prudent 40c final dividend and 60c interim dividend, is 77% of the adjusted operational free cash flow, which came to R18 billion. The dividend payment policy of Thungela is to pay out 30% of free cash flow, but RMB Morgan Stanley questioned whether the company's payout policy had altered.

Prior to this, Thungela stated that it will keep an additional R5–R6 billion in cash on hand for use in times of low coal prices (the company has a break-even price of $83/t at this year's 12.5Mt upper end of guidance). However, it stated today that the liquidity cushion has been increased to R8.2 billion.

Ndlovu claimed in an interview that the reduction in the cash provision was due to the addition of R3.2 billion in undrawn credit facilities, which increased liquidity. It actually has quite the opposite effect on dividends, he claimed, rather than being detrimental. Ndlovu recognised that a cautious approach was evident in the final dividend announcement.

This was done to account for Transnet's performance, the trajectory of coal prices, and the previously announced acquisition of the Australian mine Ensham for A$335 million, which would be paid for using cash on hand of R14.7 billion as of December 31 rather than cash created this year.Ndlovu stated that he was eager to complete the Ensham purchase as soon as possible since, according to the sale agreement, Thungela would be paid an additional sum of no more than $102 million while the transaction was being finalised.