13th Feb 2020 07:25
(Alliance News) - South32 Ltd on Thursday said its earnings plummet in the first half of its current financial year amid lower selling prices for its key commodities.
The Perth, Australia-based miner reported pretax profit of USD187 million for the six months to the end of 2019, compared to USD870 million a year earlier, as revenue declined by 16% to USD3.22 billion from USD3.81 billion.
The company said earnings suffered from "volatile" macroeconomic conditions which hurt the prices of key commodities and resulted in a temporary increase in underlying effective tax rate.
South32 said it will pay an interim dividend of 1.1 US cents in addition to a special distribution of a further 1.1 cents. A year ago, the company paid a 5.1 cents a share interim dividend and 1.7 cents special payout.
"Against a challenging backdrop for our key commodities we delivered another strong operating result with production for the majority of our operations tracking on or ahead of schedule," said Chief Executive Graham Kerr.
"We delivered record production at Brazil Alumina and maintained higher output rates at Worsley Alumina. We responded to lower manganese prices at South Africa Manganese, cutting higher cost trucking," added Kerr.
Back in mid-January, South32 had reported output for the first-half ended December.
Alumina production rose by 4% year-on-year to 2.6 million tonnes, amid record performance from Brazilian operations. Aluminium production, meanwhile, was flat at 496,000 tonnes.
Nickel production fell 2% to 20,600 tonnes, silver rose 2% to 6.1 million ounces, lead rose 14% to 55,300 tonnes, and zinc climbed by 24% to 32,500 tonnes. Manganese ore production fell 3% to 2.9 million wet metric tonnes, and manganese alloy put was down 17% to 91,000 tonnes.
However, energy coal production was 2% lower at 12.6 million tonnes and metallurgical coal output declined by 7% to 2.9 million tonnes.
Looking ahead, South32 said it remains focused on "identifying and embedding" further opportunities to improve its operating and cost performance in a sustainable way, to maximise margins.
In addition, the company said it has lowered its operating unit cost guidance for the reminder of the financial year.
South32's production guidance, meanwhile, remained unchanged, with the exception of South Africa Energy Coal, for which guidance has been adjusted to the bottom end of its prior range and remains subject to market conditions.
By Evelina Grecenko; [email protected]
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