19th Aug 2021 09:56
(Alliance News) - South32 Ltd on Thursday reported a fall in annual profit, as a small revenue increase was not enough to offset rising expenses.
In the year to June 30, the Perth-based mining and metals company posted pretax profit from continuing operations of USD42 million, sinking from USD344 million a year ago. Expenses excluding net finance costs jumped 16% to USD5.58 billion from USD4.79 billion.
Revenue increased 9.4% to USD5.48 billion from USD5.01 billion.
In 2019, revenue came in at USD7.27 billion and pretax profit at USD887 million.
Chief Executive Graham Kerr said: "We delivered a strong operating result, despite the ongoing challenges of Covid-19, achieving record production at Worsley Alumina, Brazil Alumina and Australia Manganese. We also exceeded our initial production guidance at South Africa Manganese, Cerro Matoso and Cannington.
"During the year, we made substantial progress reshaping our portfolio, completing the divestments of South Africa Energy Coal, the TEMCO manganese alloy smelter, and a portfolio of non-core precious metals royalties. This simplifies our business, reduces capital intensity and will improve our underlying operating margin."
South32 increased its total annual payout to 4.9 US cents per share from 2.1 cents for the prior year, as well as declaring a special dividend of 2.0 cents. In 2019, the miner paid a 7.9 cents dividend and a special dividend of 1.7 cents.
"Looking ahead, we expect to see strong volumes at our base metals operations - Mozal Aluminium, Cerro Matoso and Cannington - following investment in improvement projects that are designed to increase production into favourable markets. At the same time, we continue to pursue cost and volume efficiencies to offset stronger producer currencies and cyclical inflation," Chief Executive Graham Kerr said.
South32 shares fell 1.1% to ZAR30.76 each in Johannesburg on Thursday morning. In London, the stock was down 2.1% at 148.60 pence.
By Greg Roxburgh; [email protected]
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