TerraCom expects FY22 earnings to be close to its market cap; 12% dividend up for grabs

Fri 10 Jun 22, 11:19am (AEST)
Coal 3 Mining
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Key Points

  • TerraCom expects to generate $423m in earnings in FY22
  • This is massive compared to the company's market cap of around $440m
  • TerraCom has aggressively cleared its debts and expects to pay a 10 cent dividend in September

TerraCom (ASX: TER) is another coal miner printing cash this year thanks to an ongoing coal shortage and record prices.

The South Africa and Australia-based coal miner said it was on track to deliver 640,000 tonnes from its Blair Athol Project in Queensland for the June quarter.

TerraCom reaffirmed that Blair Athol will achieve around 2.3m tonnes in coal sales for FY22.

2022-06-10 10 49 45-pdf
Source: Terracom

Based on earnings attributable to TerraCom, it expects to generate $423m in EBITDA in FY22.

This is massive relative to the company's market cap of around $440m.

Massive dividend on the horizon

TerraCom has been aggressively paying off its debts.

The total redemption value of its Euroclear Bond was US$167.1m as at 30 June 2020. The company managed to fully repay the bond on 25 May.

With strong earnings continuing to flow through, TerraCom said it expects to recommence dividends to shareholders over the next few months.

Executive Chairman Craig Ransley said the first dividend to be returned to shareholders is expected to be paid during September 2022.

"The dividend is forecast to be an initial unfranked dividend of 10 cents per share," said Ransley. This represents a yield of 12% based off today's open of 84 cents.

2022-06-10 11 04 03-Terracom Ltd (ASX TER) Share Price - Market Index
TerraCom share price chart


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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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