TerraCom (TER) Q4 2024 TU earnings summary

Executive summary

• Achieved 2.6Mt total ROM production and 1.9Mt total coal sales in the June quarter, with Blair Athol (BA) contributing 408kt in sales, below expectations due to operational setbacks and weather impacts.

• South African operations saw an 8% increase in combined coal sales over the March quarter, driven by higher domestic sales to Eskom despite ongoing logistics challenges.

• Group safety performance remained strong, with a lost time injury frequency rate of 0.5 for the quarter and a total recordable injury frequency rate of 1.0 for the year.

Financial highlights

• Closing cash at bank as of 30 June 2024 was $12.8 million, with an additional $56.4 million in restricted cash.

• No dividend declared for the June quarter; a US$20 million prepayment agreement enabled substantial repayment of historic tax debt.

• Free on Board (FOB) operating costs at BA were $123/tonne, above expectations due to lower sales and industry-wide cost increases.

Outlook and guidance

• BA's annual coal sales guidance for FY2025 is set at 1.8Mt, aligned with port and rail capacity.

• Anticipates improved export sales in South Africa as rail logistics recover; expects steady demand from key Asian markets and stable thermal coal pricing with potential upside risk.

• If coal prices remain stable, dividend payments may resume earlier than previously anticipated.