16th Feb 2023 07:40
(Alliance News) - South32 Ltd on Thursday cut its interim dividend, as a pullback in commodity prices dragged half-year profit lower, but the diversified miner maintained its full-year guidance.
The Perth, Australia-based company reported pretax profit of USD885.0 million for the six months that ended December 31, down 39% from USD1.46 billion in the prior year.
Revenue declined 7.7% to USD3.69 billion from USD4.00 billion, bringing underlying earnings before interest, tax, depreciation and amortisation down 27% to USD1.36 billion from USD1.87 billion.
This steep decline in underlying Ebitda was due to lower commodity prices, amid cost inflation and higher raw material input prices. These factors were partly offset by the benefit of weaker producer currencies.
In the first half of its financial year ending June 30, South32 grappled with soaring costs.
Expenses excluding net finance income jumped by 21% to USD3.30 billion from USD2.72 billion.
However, South32 lowered its full-year operating unit cost guidance or held it largely unchanged for the majority of its operations, reflecting planned production growth, as well as updated price and foreign exchange assumptions.
South32 declared an interim dividend of 4.9 US cents, down 44% from 8.7 cents.
Headline earnings per share decreased by the same margin, dropping to 12.7 cents from 22.8 cents.
Following lower earnings, the miner revised down its capital expenditure guidance by USD105.0 million to USD1.14 billion for the 2023 financial year, reflecting expected activity and timing of vendor payments in the second half.
"We delivered another period of strong production results, and while commodity prices retreated from record levels, we recorded one of our largest profit results to date with Underlying Eitda of USD1.36 billion," South32 Chief Executive Graham Kerr said.
"Our strong financial result was underpinned by production growth of 12%, our recent portfolio improvements, which increased our exposure to the metals critical to a low-carbon future, and continued focus on cost efficiencies," Kerr said.
The company also announced some management changes, appointing Chief Financial Officer Katie Tovich as Chief Human Resources & Commercial Officer. Vice President for Finance Sandy Sibenaler takes over from Tovich as the new CFO.
South32 kept its annual production guidance unchanged.
Shares in South32 closed up 0.9% at AUD4.66 in Sydney on Thursday. They were up 2.5% to ZAR57.88 on Thursday morning in Johannesburg.
By Artwell Dlamini, Alliance News reporter
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