Sentula boasts healthy profit

Johannesburg - SA mining contractor Sentula Mining [JSE:SNU] on Thursday reported a 35% rise in full-year profit and said the outlook for the current financial year remained robust, given its exposure to the more resilient coal industry.

Shares in the company, down more than 5% so far this year, jumped 7% by 07:18 GMT, compared with a 0.39% fall in the JSE All Share [JSE:J203] index.

Sentula said full-year headline earnings per share rose to 21.7 cents from 16.1c a year earlier. Revenue rose 5% to R2.51bn.

Chief executive Robin Berry said demand from coal mines was strong after logistics group Transnet increased capacity on the rail lines connecting collieries with the coastal export terminal. Consistent demand for coal from state-owned power utility Eskom also helped, he said.  

“The outlook for deployment of equipment in the coal industry is still quite buoyant for this financial year,” he told Reuters.

“The coal industry is a lot more stable and a lot more defensive (than other commodities).”    

The company reported a basic loss per share of 88.9c due to a R591m impairment charge from equipment held for resale at its discontinued Megacube opencast operation.    

Sentula has invested in coal projects in South Africa, Botswana and Zambia, some of which are nearing production or are at the exploration phase.

Its Nkomati anthracite mine in South Africa, which was placed on care and maintenance in 2011 due to regulatory and environmental issues, is expected to resume operations in the second half of this financial year.

Barry said Sentula was open to different options to maximise benefits from the two coal projects it owns in Mpumalanga province, either by developing or selling them.

Each of those projects, once developed, could produce 1 million tonnes of thermal coal a year.

“We have approaches all the time, but there is nothing firm as we speak,” he said. “Our strategy is to monetise this or next financial year.”  

The company decided not to declare a dividend.

Sentula shares were up 7.03% to R1.98 on Thursday morning.