South32 shares fall on profit plunge
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More news: South32 shares were 3.08% lower by 3.30pm AEDT as the market digested the news that the miner’s net profit fell 92% during the first half of the financial year.
The company pointed to falling commodity prices and lower coal volumes as reasons for its profit drop. It also announced it would cancel its share buyback.
Miner South32 posts 92% profit drop, announces US$2.16b investment
The news: South32 has reported a 92% fall in net profit and has cancelled its share buyback as falling commodity prices and lower coal volumes hit the miner's first-half earnings.
The numbers: The Perth-based group posted a net profit of USD53 million ($82 million), down from USD685 million during the prior corresponding period (pcp).
Revenue fell 15% to USD3.133 billion, while underlying earnings decreased 93% to USD40 million from the pcp.
The board declared an interim dividend of US0.4 cents, fully-franked, payable on 4 April.
During early trading on the ASX, the company's shares rose 0.81% to $3.10.
The context: South32 CEO Graham Kerr said that the group's record aluminium production was offset by commodity price headwinds and lower metallurgical coal volumes.
The company also cancelled its share buyback "to manage our financial position and ensure we retain the right balance of flexibility, efficiency and prudence".
Meanwhile, the company announced a USD2.16 billion investment in the Taylor zinc-lead-silver deposit at its Hermosa project in Arizona, with first production expected in the second half of the 2027 financial year.
What they said: On the Taylor investment, Kerr said: "This investment is a major milestone for our business, that further reshapes our portfolio towards commodities critical to a low-carbon future. Taylor is expected to deliver value for shareholders for decades to come and underpin further growth phases at our regional scale Hermosa project, establishing it as a globally significant producer of commodities critical for a low-carbon future."
The source: ASX announcement
