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Our opinion on the current state of BAWBarloworld (BAW) is a prominent international supplier of heavy earth-moving equipment and vehicles across various sectors, including mining, agriculture, infrastructure, power, automotive, and logistics. With operations spanning 24 countries, particularly in Southern Africa, Russia, and other emerging markets, Barloworld boasts a diverse portfolio that provides some resilience against economic downturns. The company's renowned brands like Caterpillar, Avis, Massey-Ferguson, and Challenger contribute to its strong market presence. Barloworld recently divested its Spanish and Portuguese operations, freeing up funds for potential investments, such as the acquisition of the US-owned Wagner Asia Group in Mongolia. While geopolitical tensions, especially the Ukraine crisis, have posed challenges in receiving payments from Russian customers and impacted commodity prices, Barloworld remains financially equipped to navigate these uncertainties. Despite experiencing a decline in share price, the company reported positive results for the fiscal year ending September 2023, with revenue from continuing operations increasing by 14% and headline earnings per share (HEPS) rising by 5.5%. In subsequent trading updates, Barloworld reported revenue decreases attributed to the mining sector slowdown and geopolitical conflicts. However, the company's EBITDA margin improved, indicating operational efficiency despite revenue challenges. From a technical perspective, Barloworld's share price experienced significant fluctuations in response to the COVID-19 pandemic but showed signs of recovery with an upside breakout from an extended "island formation" and a breakthrough of its long-term downward trendline. While the share price has been drifting sideways and downwards since January 2022, it is perceived as good value at current levels, especially considering its low price-to-earnings (P/E) ratio of 4.65. Barloworld's strategic initiatives, including the share buyback program, demonstrate confidence in its future prospects. However, ongoing developments in Ukraine and Russia will continue to influence the company's performance and investor sentiment.
JSE:BAW
by PDSnetSA
Our opinion on the current state of ASCAscendis Health (ASC) is a South African company operating in the health sector, manufacturing products for animals, plants, and humans. The company underwent significant restructuring and financial transactions to address its debt burden and refocus its business strategy. In January 2020, Ascendis Health announced its intention to focus on four core business areas: pharmaceuticals, medical, consumer health, and animal health. Despite considering the sale of its subsidiary Remedica, the board opted to negotiate a recapitalization deal with L1 Health and Blantyre Capital to address the company's debt issues. Following negotiations, a deal was struck in May 2021, where the consortium acquired 100% of Remedica and Sunwave, along with other assets, in exchange for debt and financing facilities. This recapitalization aimed to safeguard the business and improve its liquidity. As part of its restructuring efforts, Ascendis Health sold its animal health division in July 2021 to reduce debt. Despite a decline in revenue and gross margin in the financial year ending June 2023, the company managed to decrease operating costs and eliminate senior debt, leaving it with cash reserves of R102 million. In a trading statement for the six months ending December 2023, Ascendis Health estimated a significant improvement in headline earnings per share (HEPS) from continuing operations compared to the previous period, indicating a positive turnaround. Technically, the company's stock has experienced significant volatility, peaking in 2016 before declining sharply and moving sideways. Despite a recent jump in share price following the announcement of a buyout offer and delisting from the JSE, the stock remains a risky penny stock, priced at around 81 cents. Overall, Ascendis Health's restructuring efforts and improved financial performance suggest a positive trajectory, but investors should be cautious due to the company's history of volatility and the ongoing risk associated with its penny stock status.
JSE:ASC
by PDSnetSA
Our opinion on the current state of ADHADvTECH (ADH) is a prominent player in the commercial education sector in South Africa, operating in both schools and tertiary education divisions. The schools division, comprising institutions such as Crawford, Trinity House, and Abbots, historically formed the backbone of the company's operations. However, increased competition in the schools sector has led to margin pressures in recent years, shifting the focus towards the more profitable tertiary division. The tertiary division, including Varsity College, Rosebank College, and specialized tertiary offerings, has emerged as the primary profit driver for ADvTECH. The acquisition of Monash College with its IIE campus has significantly bolstered this division, adding 6,500 students and modern facilities to the company's portfolio. In its financial results for the year ending December 31, 2023, ADvTECH reported a commendable 13% increase in revenue and a 19% rise in headline earnings per share (HEPS). Operating margins in the education divisions improved, driven by operating leverage, although net finance costs increased due to additional leases and higher borrowing costs. From a technical standpoint, ADvTECH's stock has been on a strong upward trend since May 2020. With a price-to-earnings ratio (P/E) of 16.65, the stock is deemed relatively cheap, suggesting further upside potential. Moreover, the company's solid market position, coupled with its defensive nature in times of low economic growth, makes it an attractive investment option, especially considering parents' willingness to prioritize education spending. Overall, ADvTECH appears to be a solid blue-chip company with promising medium-term prospects. Any improvements in the South African economy are likely to directly benefit the company, further enhancing its growth trajectory.
JSE:ADH
by PDSnetSA
Our opinion on the current state of MTNMTN, a leading emerging market mobile operator, serves a vast customer base of 290 million people across 19 countries in Africa and the Middle East, with significant subscriber bases in Iran, Nigeria, and South Africa. The company operates in a challenging environment characterized by fierce competition and declining voice revenue, offset to some extent by the growth in data usage. However, political risks in key markets such as Iran and Nigeria add to its overall risk profile. To diversify its revenue streams and address these challenges, MTN is expanding into fintech services, partnering with Sanlam to offer insurance products and rolling out mobile money services in several countries. The company aims to become a digital operator with a focus on fintech, digital, enterprise, and wholesale business areas. Despite its efforts to expand into new sectors, MTN faces regulatory and tax challenges in some markets. For instance, it received a tax assessment of $773 million from Ghanaian authorities, reminiscent of similar challenges in Nigeria. However, partnerships such as the one with Mastercard, which took a significant stake in its fintech business, provide opportunities for growth and innovation. In its financial results for the year ending December 31, 2023, MTN reported a 6.9% increase in service revenue but a significant decline of 72.3% in headline earnings per share (HEPS). The decline in HEPS may be attributed to various factors, including regulatory challenges and economic volatility in key markets like Nigeria. With a current price-to-earnings ratio (P/E) of 29.14, MTN's stock appears expensive, especially considering its recent downward trend since March 2022. Investors are advised to monitor the stock closely and wait for a clear upside break from the downward trendline before considering further investment.
JSE:MTN
by PDSnetSA
Our opinion on the current state of GMLThe Gemfields Group (GML), formerly known as Palinghurst Group, operates as a mining group with significant projects in the production of emeralds and rubies. Its major projects include Kagem, the world's largest producer of emeralds (located in Zambia), and rubies (at Montepuez in Mozambique), as well as Jupiter Mines, a South African producer of manganese. Led by Brian Gilbertson, formerly the CEO of BHP Billiton, the company identified the underdeveloped semi-precious stones market as an opportunity for consolidation and professional management, leading to the establishment of Gemfields. Gemfields disposed of 60% of Jupiter Mines when it was listed on the Australian Stock Exchange (ASX) in April 2018, aligning with its strategic decision to focus purely on gemstones rather than being a diversified mining company. The company's shares are relatively well-traded, with an average daily trading volume of approximately R5 million worth of shares. However, being a commodity-based company, Gemfields faces inherent risks tied to fluctuations in the prices of emeralds and rubies on the international market, as well as the challenges associated with mining operations in third-world countries. Despite these risks, Gemfields has managed to carve out a niche for itself with limited competition, positioning it well to benefit from the global economic recovery. On October 24, 2022, the company announced the resumption of operations at MRM (Montepuez Ruby Mine) following an insurgent attack near the mine. Additionally, on August 7, 2023, Gemfields announced plans to construct a new processing plant to triple its output from the Montepuez ruby mine. In its financial results for the year ending December 31, 2023, Gemfields reported a 23% decline in revenue and a headline loss of 0.9 cents (US) per share, compared to a profit of 4.8 cents in the previous period. The company attributed this performance to the withdrawal of a higher-quality emerald auction in November 2023 and an unrealized write-down of Gemfields' non-core equity holding in Sedibelo Resources, a platinum group metals mining company. From a technical standpoint, the share price of Gemfields rose after an island formation, entering a strong upward trend that lasted until July 2023 when the trendline was broken. It is advisable to wait for the establishment of a new upward trend before considering investment in Gemfields.
JSE:GML
by PDSnetSA
Our opinion on the current state of WEZWesizwe (WEZ) is engaged in platinum group metals mining, primarily through the development of the Bakubung Platinum Mine (BPM), located near Rustenburg on the Western limb of the Bushveld complex. The company's focus includes accessing the Merensky and Upper Group 2 (UG2) resources. Additionally, Wesizwe owns a 17.1% stake in projects 1 and 3 of Maseve Investments. In its financial results for the six months ending June 30, 2023, Wesizwe reported a loss per share of 59.63 cents, a significant increase compared to a loss of 4.09 cents in the previous period. The company attributed the total comprehensive loss of R981.5 million to higher total administration expenses, which included both administration expenses and capitalized costs. In a trading statement for the fiscal year ending December 31, 2023, Wesizwe estimated a headline loss ranging between 0.95 cents and 1.77 cents per share, compared to a loss of 8.24 cents in the previous period. Despite being viable for private investors with an average daily trading volume of about R176,000 worth of shares, Wesizwe is considered a marginal precious metals company. Its performance is subject to the volatility of platinum group metals (PGM) prices, making it inherently risky. The share price has declined from a high of 197 cents in October 2021 to levels around 47 cents following the recent results. Given its risk profile, investors may find better opportunities in other PGM market options.
JSE:WEZ
by PDSnetSA
Our opinion on the current state of CTACapprec (CTA) is a fintech company offering payments and payment infrastructure, as well as software and services. It counts Patrice Motsepe's African Rainbow Capital (ARC) among its stakeholders. The company's payment services are facilitated through African Resonance and Dashpay, while its software segment involves systems development and consulting. Additionally, Capprec owns a 17.5% stake in Resonance Australia, a startup business. It boasts major South African banks among its clients. In its financial results for the six months ending September 30, 2023, Capprec reported a 3% increase in revenue and a substantial 105.6% surge in headline earnings per share (HEPS). The company's net asset value (NAV) also grew by 3.3% to 124.5 cents per share. Capprec attributed the growth in headline earnings to a reduction in the expected credit loss raised for GovChat during the reporting period. In a business update for the fiscal year ending March 31, 2024, Capprec noted increased business activity in the Payments division, improved expense management, and strong cash flows, resulting in a robust improvement in the group's financial performance in the second half of the financial year. Both the Payments and Software divisions continued to attract new clients, diversify revenue sources, and grow market shares. The share is currently trading at a price-to-earnings (P/E) ratio of 10.67. With an average daily trading volume of roughly R1.3 million worth of shares, Capprec presents a feasible investment opportunity for private investors. The company appears to be well-managed, profitable, and cash-flush, which may attract institutional interest. However, from a technical perspective, the share has been in a downward trend since January 2022. Investors are advised to wait for a break above its downward trendline before considering further investment.
JSE:CTA
by PDSnetSA
Our opinion on the current state of TRETrencor (TRE) primarily holds 47.78% of Textainer, a US-listed company engaged in renting shipping containers (TEUs). It's worth noting that Trencor executed a share buyback program, spending R100 million to repurchase its own shares between October 4, 2018, and December 6, 2018. Investors have expressed dissatisfaction with Textainer's performance relative to its competitors. For instance, Triton achieved a return on equity of 16%, significantly higher than Textainer's 1.7%. Trencor decided to unbundle its holding of Textainer to its shareholders, resulting in a tax of R17 million. In its financial results for the year ending December 31, 2023, Trencor reported headline earnings per share of 71.5 cents, a significant improvement from 1.7 cents in the previous period. The company's net asset value (NAV) also increased to 813 cents per share. With an average daily trading volume of R1 million worth of shares, Trencor presents a practical investment opportunity due to its liquidity. Overall, Trencor's performance seems to have improved notably, driven by its investment in Textainer. However, investors should continue monitoring both Trencor and Textainer's performance, as well as the overall dynamics of the shipping container rental market.
JSE:TRE
by PDSnetSA
Our opinion on the current state of CLIClientele Life (CLI) operates as a small insurance company, offering both short- and long-term policies and underwriting insurance products. Their distribution channels include agents, brokers, and tele-sales. A significant development for the company was its acquisition of 1Life Insurance for R1.914 billion, to be paid through the issuance of 117,815,756 ordinary shares in Clientele. This acquisition likely aimed to expand Clientele's market reach and product offerings. However, in its financial results for the six months ending December 31, 2023, Clientele reported a decline in headline earnings per share (HEPS) by 35%. The company attributed this decrease to lower insurance revenue, which was down 5% compared to the previous period. This decline was mainly due to a lower release of the Contractual Service Margin (CSM) and Risk Adjustment (RA), driven by higher-than-expected withdrawal experience. Despite the decline in earnings, the company's price-to-earnings (P/E) ratio stands at 6.6, which appears cheap relative to its earnings. This may present an opportunity for investors seeking undervalued stocks. Moreover, the share is traded heavily enough to accommodate most private investors. Overall, Clientele Life may offer reasonable value at its current P/E ratio, especially considering its potential to benefit from improvements in the South African economy. However, investors should carefully consider the impact of the acquisition of 1Life Insurance and monitor the company's financial performance and market position.
JSE:CLI
by PDSnetSA
Our opinion on the current state of TKGTelkom (TKG) has undergone significant transformations since its days as the government-controlled provider of fixed-line telephone connectivity in South Africa. The advent of cell phones forced Telkom to subsidize the development of its competitors, resulting in substantial financial burdens. CEO Sipho Maseko noted that Telkom has effectively subsidized other networks to the tune of R70 billion over the past two decades. Currently listed, Telkom operates independently, divided into five divisions: 1. Open Serve: South Africa's primary supplier of wholesale connectivity. 2. Telkom Consumer: A leading supplier of broadband internet connectivity with a growing mobile phone network. 3. Yellow Pages: Provides advertising and marketing services to local businesses. 4. BCX: An ICT solutions company operating in Southern Africa. 5. Swiftnet: Formed to manage Telkom's masts, towers, and property interests. While Telkom faces challenges related to regulatory decisions on interconnect fees by ICASA, it has been well-managed, with downsizing expected to lead to improved profitability. The company is transitioning from fixed-line to mobile services. The resignation of CEO Sipho Maseko and plans to list its property and towers division separately as Swiftnet were significant developments. However, the listing was postponed due to market conditions, including the war in Ukraine. The company also faced investigations into the sales of Iway Africa and Africa Online. Various acquisition offers, including a R7 billion bid for the government's stake and CEO Sipho Maseko's consortium's proposal to acquire 35% of Telkom for R12 billion, demonstrated interest in the company. In its financial results, Telkom reported revenue and headline earnings per share (HEPS) growth for the six months ending September 30, 2023. Lower depreciation charges and growth in EBITDA contributed to profit, despite higher interest rates increasing net finance costs. The company's revenue and EBITDA remained stable in the following quarter. The announcement of the sale of Swiftnet for R6.75 billion to reduce Telkom's debt was a significant development. However, Telkom's share price has experienced volatility, falling from highs in June 2019 to lower levels in March 2020. The company's high debt relative to its market capitalization poses risks for investors, indicating challenges in navigating the difficult economic landscape and stiff competition.
JSE:TKG
by PDSnetSA
Our opinion on the current state of TLMTelemasters (TLM) is a provider of voice, data, and cloud communications services, offering fixed line, fixed cellular, fixed data, and PBX solutions. Its operations are divided into three main divisions: 1. Catalytic Connections (Pty) Limited, a diversified ICT managed solutions provider catering to medium and small enterprises. 2. Contineo Virtual Communications (Pty) Limited, which operates a Next Generation Unified Communications platform based on Cisco Broadsoft technology. 3. PerfectWorx Consulting (Pty) Limited, a specialized network systems integrator. 4. Ultra Data Centre (Pty) Limited, responsible for building and operating a data centre located outside of Pretoria. In its financial results for the year ending June 30, 2023, Telemasters reported a slight decline in revenue by 1.3% but saw a significant improvement in headline earnings per share (HEPS), which stood at 0.81c compared to a loss of 3.73c in the previous year. The company noted several positive developments: - Operating profit recovered from the prior year's loss, showing an improvement of R2.8 million year-on-year. - The DataCentre business experienced growth and is now generating sustainable profits. - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) continued to grow, increasing to R8 million from R7 million in the prior year. - Telemasters maintained its dividend policy, declaring dividends of 0.85 cents per share during the year. In a trading statement for the six months ending December 31, 2023, the company estimated a significant increase in HEPS by 160%. However, it's worth noting that the share is thinly traded, with less than R1400 worth of shares changing hands each day. The majority of shares are held by a single shareholder, the Maison D-Obsession trust, which may make it impractical for private investors to trade.
JSE:TLM
by PDSnetSA
Our opinion on the current state of GMLThe Gemfields Group (GML), formerly known as Palinghurst Group, is a mining company with two significant projects: (1) Kagem, the world's largest producer of emeralds (located in Zambia) and rubies (at Montepuez in Mozambique); and (2) Jupiter Mines, a South African manganese producer. Led by Brian Gilbertson, former CEO of BHP Billiton, Gemfields identified an opportunity for consolidation and professional management in the underdeveloped semi-precious stones market, leading to its current operations. Gemfields divested 60% of Jupiter Mines during its listing on the Australian Stock Exchange (ASX) in April 2018, aligning with its strategic decision to focus solely on gemstones and cease being a diversified mining company. With an average daily turnover of approximately R5 million, Gemfields shares are relatively liquid. However, like all commodity shares, they carry inherent risks, particularly dependent on international prices of emeralds and rubies, as well as the challenges associated with mining in developing countries. Despite these risks, Gemfields has carved out a niche in the market with limited competition and is poised to benefit from the global economic recovery. Operations at MRM resumed on October 24, 2022, following an insurgent attack, signaling resilience in the face of adversity. Furthermore, on August 7, 2023, the company announced plans to construct a new processing plant at the Montepuez ruby mine, aiming to triple its output. In its financial results for the six months ending June 30, 2023, Gemfields reported revenue of $153.6 million, compared with $193.2 million in the previous period, with headline earnings per share (HEPS) at 0.8c (US) compared to 3.7c in the previous period. Despite the decline, the company maintained a strong balance sheet, with net cash of $62 million and 97% collection of auction receivables amounting to $63.8 million. In an operational update for the six months ending December 31, 2023, Gemfields reported total auction revenues of $242 million and net cash of $11.1 million, highlighting strong auction revenues and pricing for both emeralds and rubies. However, in a trading statement for the year ending December 31, 2023, the company estimated a headline loss of 16c compared to a profit of 78.3c in the previous year. Technically, the share experienced a strong upward trend until July 2023 when the trendline was broken. We recommend waiting for the establishment of a new upward trend before considering further investment.
JSE:GML
by PDSnetSA
$JSETBS - Tiger Brands: The Tiger Roars But I Count Five WavesSee link below for previous analysis. Tiger Brands has traded as forecasted. Wave (iii) was ignited by the CEO stepping down and the momentum was sustained with very small pullbacks. Wave (iv) has unfolded as a flat pattern and wave (v) is underway with the invalidation level now raised to 18930. Wave (v) is always risky as it is hard to forecast how it will unfold and how strong it will be but i will maintain a bullish stance above 18930.
JSE:TBSLong
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of JSEThe Johannesburg Stock Exchange (JSE), listed on its own platform, serves as a securities exchange facilitating the trading of shares, bonds, and derivatives. With approximately 320 listed and quoted shares, it stands as the largest stock exchange in Africa by market capitalization and ranks 17th globally. Historically, the JSE has been consistently profitable, largely due to its former monopoly on equity trading in South Africa. However, in 2017, several competing stock exchanges were registered and licensed to trade equities in South Africa, with the A2X emerging as the most notable competitor. A2X has attracted a growing number of listings, including major players like Naspers and Standard Bank, and claims to offer trading at significantly lower costs compared to the JSE. Responding to this competition, the JSE has reduced its costs, yet still maintains a dominant market share of 99.7% in South Africa. Benefitting from increased trading volumes amid the volatility of COVID-19, the JSE remains a relatively stable investment, well-capitalized and trading at a P/E ratio of around 11.23. Although significant competition from A2X may take time to materialize, it is steadily gaining ground. In its financial results for the year ending 31st December 2023, the JSE reported a 12.2% increase in headline earnings per share (HEPS) and a return on equity (ROE) of 19.4%, with revenue up by 6.2%. The growth in revenue was supported by diversified business segments and asset classes, including Information Services and JSE Investor Services (JIS). Despite concerns over a steady downward trend in its share price and a reduction in the size of the JSE due to delistings surpassing new listings, the share has been moving sideways for the past three years. It remains a relatively secure blue-chip investment, though impacted by COVID-19 and local economic mismanagement.
JSE:JSE
by PDSnetSA
Our opinion on the current state of OUTOUTsurance (OUT) assumed the listing of Rand Merchant Insurance (RMI) effective from 7th December 2022. Following this transition, RMI divested its interests in Discovery (DSY) and Momentum (MTM), and divested its 30% stake in Hastings Plc for R14.6 billion. By March 2023, the insurance business of OUTsurance remained as the sole focus of RMI. In its financial results for the six months ending 31st December 2023, OUTsurance reported a 22.5% increase in gross written premiums and a notable 38.8% rise in the annualised new business premium. The company attributed the increase in the claims ratio, from 54.4% to 59.1%, to R678 million in higher natural perils claims incurred by Youi. However, it noted that Youi's working loss ratio, excluding natural perils, improved from 51.9% to 50.8%, indicating that the deterioration was entirely accounted for by the higher natural perils. From a technical standpoint, while currently at a cycle low, OUTsurance's share price has been steadily climbing since the unbundling, and the outlook suggests continued positive performance ahead.
JSE:OUT
by PDSnetSA
Our opinion on the current state of REMJohann Rupert's Remgro (REM) operates as an investment holding company, boasting a diverse portfolio of investments. Notably, it holds a 28.2% stake in Rand Merchant Bank Holdings (RMH) and a 3.9% interest in FirstRand. Additionally, Remgro owns Mediclinic, an international healthcare company with divisions in Switzerland, Southern Africa, and the United Arab Emirates, which has been delisted from the JSE. Recently, Remgro sold its 25.8% stake in the London-listed Unilever Group, acquiring the Unilever spreads business in Southern Africa, which includes renowned brands like Flora and Rama. In the foods division, Remgro owns significant stakes in Distell (31.8%) and RCL Foods (77.2%). The Unilever spreads division may find a home within a new subsidiary called "Silver 2017." Remgro also holds interests in the insurance sector, with a 29.9% stake in RMI, among other investments, including a 23.1% stake in Grindrod and a 30% stake in Seacom. The acquisition of Vumatel by Community Investment Ventures Holdings (CIVH), a Remgro subsidiary, has been approved by the Competition Tribunal, with conditions requiring free uncapped fibre services to nearby schools for the next decade. Remgro announced plans to increase its stake in RCL Foods and venture into electricity generation to supply its businesses due to concerns about Eskom's reliability. Moreover, a significant development occurred with Heineken's offer to buy 100% of Distell for R41.1 billion, a transaction from which Remgro stands to benefit substantially given its 31.7% ownership. Additionally, a partnership with Vodacom resulted in the creation of "Infraco," wherein Remgro retains a majority stake focused on dominating South Africa's fibre provision. Furthermore, Remgro recently completed the acquisition of the remaining 55% stake in Mediclinic, delisting the company from the JSE. However, its latest financial results for the six months ending 31st December 2023 showed a 39.1% decrease in headline earnings per share (HEPS) and a 4.6% decline in intrinsic net asset value (INAV). Remgro attributed the discrepancy between HEPS and headline earnings to the accretive impact of shares repurchased during the financial year. Technically, Remgro's share price experienced a low at 8388c on 7th September 2020 and was on an upward trend. However, recent disappointing results caused the share to break out of this trend. Currently trading at 12471c with a P/E ratio of 12.36, once the negative news is fully discounted, the share may represent good value. We recommend applying a 65-day exponential moving average and waiting for a clear upside break before further investigation.
JSE:REM
by PDSnetSA
Our opinion on the current state of TGAThungela (TGA) represents Anglo American's coal assets, which were unbundled into the hands of Anglo shareholders and separately listed on the JSE and the LSE due to Anglo's policy of transitioning away from carbon-based fossil fuels like coal. Anglo completed the sale of its final 8% stake in Thungela on 25th March 2022 for R1.67 billion. Thungela operates as a major thermal coal exporter in South Africa, boasting over 7,500 employees and exporting coal to various regions including Asia, India, SEA, and East and North African countries. The company holds a 50% stake in Phola, which operates a coal processing plant, and a 23.22% interest in the Richards Bay Coal Terminal (RBCT). With a capacity to produce over 90 million tons of coal per annum, Thungela operates 7 mines in South Africa, consisting of 4 open-cast and 3 underground mines. In its results for the year ending 31st December 2023, the company reported a profit of R5 billion, down from the previous year's profit of R18.2 billion. Earnings per share (EPS) fell to 3766c from 12708c. Thungela paid out a dividend of R2.8 billion and repurchased R500 million worth of its own shares. The company highlighted, "Industry railed volume of 47.9Mtpa in 2023, deterioration of 5% from last year • Mutual cooperation agreement establishes framework for procurement of critical spares on behalf of TFR• Industry deployed additional security on coal line." Initially trading on the JSE from 7th June 2021, Thungela's share price experienced an immediate decline to 2190c from 2600c. Initially estimated to be worth a minimum of 4400c, the share price reached a high of 37752c on 16th September 2022. However, since then, it has been moving sideways and downwards, influenced by lower coal prices and challenges with Transnet. The company is also subject to the inherent volatility associated with being a single commodity share and reliant on Transnet for transporting its product to port. Thungela has committed to paying out at least 30% of "adjusted operating free cash flow" in the form of a dividend.
JSE:TGA
by PDSnetSA